Gold Hits New Record

Gold nuggets and bars, 2006/1/17 * * image restricted to news use on this subject only * *
AP
Gold prices traded in record territory again Thursday as inflation-wary investors bid prices up near the psychologically important threshold of $1,300 an ounce.

Gold prices gained $4.20 to settle a record $1,296.30 an ounce, building on gains it made after the Federal Reserve announced Tuesday it might take further steps to stimulate the economy. Investors buy gold when they want to protect themselves against inflation, and it appears the Fed's statement stoked fears the dollar's value will continue to fall.

If gold passes $1,300 an ounce, it will likely stay above that level for some time, said CPM Group analyst Carlos Sanchez.

"It's seen technically as a resistance level," Sanchez said. If gold breaks through that barrier, investors will feel confident enough to bid it even higher. "The next rally could be between $1,320, or $1,330," Sanchez said.

Gold prices have nearly doubled since 2008, when an economic panic shook global credit markets and central banks responded by flooding currency markets. Since then, global economic uncertainty and inflation fears have spurred investors to shift money from stocks and cash into gold.

Other precious metals also rose. Silver December contracts gained 15.8 cents to settle at $21.213 an ounce and copper gained 2.55 cents to settle at $3.5905 a pound.

September platinum gained $17.30 to settle at $1,650.20 a pound while September palladium gained $15.20 to settle at $554.85.

In other trading, grain prices continued to sag after last week's run-up.

Corn fell 5.75 cents to $4.9925 a bushel. December wheat contracts fell 22.5 cents to settle at $6.9725 a bushel. November soybeans added 5 cents to settle at $10.935 a bushel.

Coffee gained 1.55 cents to settle at $1.8310 a pound.

Oil prices rose after two reports provided some hope for the economic recovery strengthening. The Conference Board said its index of leading economic indicators increased more than expected in August and the National Association of Realtors said sales of previously occupied homes rose 7.6 percent last month after plummeting in July.

Benchmark oil for November delivery rose 47 cents to $75.18 a barrel on the Nymex. In other trading, heating oil rose 0.75 cent to settle at $2.1145 a gallon and gasoline added 1.60 cents to settle at $1.9174 a gallon.

Natural gas prices edged higher as traders kept an eye on a potential tropical storm that could disrupt Gulf of Mexico production. Natural gas gained 5.3 cents to settle at $4.019 per 1,000 cubic feet on the New York Mercantile Exchange.