Gold futures were up again for the second day running pushed by a weakened dollar and ever increasing oil prices. Oil is over that magical 100 dollars a barrel and gold is now well over the 850 dollars an ounce. Gold is evidently being seen far and wide as a safe haven investment.
In the futures, gold for February delivery rose $8.60 to $868.60 an ounce on the New York Mercantile exchange. Also February silver added 17 cents to $15.40 an ounce, while February copper gained 7.85 cents to $3.1380 an ounce.
The confidence in gold as a short and long term investment is clearly demonstrated by the gold futures now maintaining a steady climb to what some analysis see as a new plateau for gold. 1000 US dollars an ounce is now not out of the question and this could be reached in the first quarter of the year some analysis predict.
On Wednesday, gold prices around the world hit a trading high of $864.50, marking an almost historic 30-year record in what's known as front-month trading of gold contracts; the previous high was $850. Gold prices have increased over 3o percent in 2007. A great investment by anybodies standard.
"The euro continues to tick a little higher, and that's supporting the gold market," said James Steel, a precious metals analyst at HSBC. "If you combine that with the uptick in the oil price, you have a cocktail that is positive for bullion."
According to Jon Nadler, an analyst with Kitco Bullion Dealers, a gold buying spree by investment funds also propped up gold Thursday, the second trading day of the new year.
"The funds' Godzilla-sized footprint is really evident today. They have a lot of money to play around with, and it's helping gold," Nadler said.
The surge in the price of oil - which hit $100 a barrel for the first time ever Wednesday and did so again Thursday - also contributed to boost the price of gold while investors shifted more resources to the precious metal, often seen as a hedge against inflation and political uncertainty.
We can probably expect a little profit taking today or tomorrow resulting in a slight drop, giving some advantage for latecomers to buy in, but it looks certain that the gold price is going to continue its climb over the coming months.