Gold Rises to 9-Month High on Inflation Concerns; Silver Gains

BY

Gold surged to a nine-month high in New York after the U.S. said inflation accelerated more than forecast in January and commodity prices jumped.

The consumer-price index increased 0.2 percent last month, more than the 0.1 percent economists estimated, boosting the appeal of gold as a hedge. Crude oil jumped above $60 a barrel and corn reached a 10-year high, helping to send the Goldman Sachs Commodity Index to the highest level this year.

``Commodities are up across the board,'' said Ron Goodis, director of Equidex Brokerage Group Inc. in Closter, New Jersey. ``There's still inflation. People want to own assets and they run for gold.''

Gold futures for April delivery rose $23, or 3.5 percent, to $684 an ounce on the Comex division of the New York Mercantile Exchange, after earlier reaching $686.40, the highest for a most-active contract since May 19. Gold has climbed 23 percent in the past year.

The Goldman Sachs index of 24 commodities rose 2.1 percent to 440.70, after reaching 441.76, the highest since Dec. 26.

Gold's gain accelerated after the New York Mercantile Exchange said the number of open futures and options contracts was higher than some traders expected.

``Once the open-interest report came out, there was a big incentive to buy,'' said Michael Guido, director of hedge-fund marketing at Societe Generale SA in New York. ``There are no new shorts coming into the market.''

Open Interest

Some traders were concerned that gold's decline yesterday of 1.8 percent, the biggest in six weeks, would spark renewed selling and may end this year's rally. Instead, the number of open contracts fell by 3,476 contracts, or less than 0.9 percent, to 396,115, the Comex said.

``We're seeing some bargain-hunting from bullish traders who think yesterday's drop was a short-term phenomenon,'' said Daniel Vaught, a commodity analyst at A.G. Edwards & Sons Inc. in St. Louis. ``The market has shown a tendency to pivot around the $660 level.''

Gold rose earlier after the Commerce Department reported the 0.2 percent rise in consumer prices, after a 0.4 percent gain in December.

``There's still underlying inflation expectations out there,'' Vaught said.

Inflation Measure

Core inflation, excluding food and energy, climbed to 2.7 percent during the 12 months ended in January, the biggest rise since October, after a 2.6 percent rise for the period ended in December.

Some investors buy gold when consumer prices climb to hedge against inflation. Gold futures reached a record $873 an ounce in January 1980 when the inflation rate surged to 13.9 percent. Gold climbed 23 percent last year as consumer prices gained 2.5 percent.

Silver also gained. Silver for March delivery rose 44.3 cents, or 3.2 percent, to $14.273 an ounce on the Comex. Silver has climbed 10 percent this year while gold has gained 7 percent.

雷文

謝謝 BY!!!

雷文

Gold traded near a nine-month high in Asia after rising on inflation concern, stoked by high oil prices, which boosted the precious metal's appeal as a hedge. Tokyo gold futures rose to a 21-year high.

A U.S. government report yesterday showed consumer prices rose more than forecast in January, and crude oil in New York rose above $60 a barrel. Some investors buy gold when energy expenses climb. Gold futures reached a record $873 an ounce in January 1980 when oil costs doubled in a year, fueling inflation.

``The larger investors in terms of the funds will be taking a more serious look at gold,'' said Darren Heathcote, Investec Bank (Australia) Ltd. head of trading. ``Expectations are that we will be looking for $700.''

Gold for immediate delivery was little changed at $677.65 at 3:13 p.m. Sydney time after rising 3.3 percent yesterday, when it reached a nine-month high of $682.25. Gold has risen 8.4 percent in the past six months.

U.S. consumer prices rose 0.2 percent in January, giving credence to Federal Reserve Chairman Ben S. Bernanke's message that inflation remains the central bank's primary concern.

``Following both the rise in the oil price, the talk that the Fed is still concerned about inflation, and the CPI numbers, I think that is still feeding through into the market,'' Investec's Heathcote said.

In Japan, gold for delivery in December 2007 gained the daily limit of 60 yen, or 2.3 percent, to 2,635 yen a gram ($677 an ounce), the highest since Sept. 1985, on the Tokyo Commodity Exchange.

Weak Yen

Tokyo futures have been supported by Japan's weak currency, which makes the yen-denominated contract more attractive than overseas gold priced in dollars. The yen had its biggest slide since Dec. 8 against the dollar yesterday.

Japanese investors also buy bullion when their currency weakens in a bid to hedge against an erosion in the value of their yen-denominated assets, such as stocks.

``The Japanese have been very cautious of the inflationary picture that is building in Japan,'' Heathcote said. ``If the yen weakens much further it could be reason for the Japanese to start buying again.''

Gold futures for April delivery traded at $681.30 an ounce, down $2.70, or 0.4 percent, at 3:30 p.m. Sydney time in after- hours trading on the Comex division of the New York Mercantile Exchange.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

雷文

Gold was little changed on Thursday, with sentiment remaining bullish after it surged more than 3 percent to a nine-month high as strong energy prices and geopolitical tensions induced heavy fund buying.

Traders were eager to test the metal's upside after Wednesday's rally, with demand rising for gold exchange-traded funds (ETF) and investors keen to diversify into gold and other commodities as U.S. equity prices were holding near record highs.

Gold's allure as a tool to hedge against inflation also rose after a surprisingly big pick-up in core U.S. consumer prices in January.

"The market is very bullish and $700 an ounce is clearly in focus," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management.

"Demand for gold ETFs is clearly there. Also funds could be buying gold to diversify from equities which have been near record highs and also with U.S. bond prices dropping."

As of 0236 GMT, spot gold <XAU=> was little changed at $678.30/679.00 per ounce, compared with $678.90/679.60 in New York, where it had jumped more than 3 percent to a nine-month high of $682.10.

Technicals improved after Wednesday's rally, and cash gold could test the psychologically important $700 level in the near term. It was more than 1 percent above its seven-day moving average of around $670.

On Wednesday, crude oil prices rose above $60 a barrel as a rash of snags affecting U.S. oil refineries, pipelines and an oil field sparked worries of a supply crunch in the United States, the world's biggest energy consumer.

Tensions in Iran induced safe-haven buying in gold.

Iran vowed on Wednesday to press on with its nuclear fuel programme, ignoring a U.N. deadline to freeze uranium enrichment or face broader sanctions, but offered to guarantee it would not try to develop atomic weapons.

"I'm a bit worried about the strength in the dollar against the yen, but gold was supported due to inflationary concerns after yesterday's strong U.S. CPI figures," Kageyama said.

U.S. January consumer price inflation was up a higher-than-expected 0.2 percent. Excluding food and energy costs, the core inflation rate rose 0.3 percent, driven by medical costs.

Japanese gold futures surged by the daily 60-yen limit to 2,635 yen ($21.80) per gram, tracking sharp gains in cash gold and reflecting heavy fund flows into other commodities.

The key TOCOM gold contract <0#JAU:>, December 2007, was at its highest since September 1985. It held at the level throughout the morning trade, and was up 2.3 percent from Wednesday's close of 2,575 yen.

kwy

Thanks BY!