Gold Closing In On US$1300/oz

Gold prices – both in the spot and futures market – touched a new record high in the international market on Wednesday as investors continued to seek refuge in the precious metal after

the Federal Reserve warned of deflation and a slowing recovery. The Fed policymakers also said yesterday that they are prepared to take further quantitative easing measures to support a struggling US economy.

Gold for immediate delivery advanced to US$1,295 an ounce before trading at US$1,293 as against the previous close of US$1,287. Gold for December delivery hit an intraday high of US$1,295.80 an ounce in electronic trading on Globex. Gold had traded around US$1,273 an ounce on Globex before the Fed’s announcement in Washington on Tuesday afternoon.

Gold is up 17% this year and is heading for its 10th annual gain.

Separately, crude oil futures rose in New York before a report forecast to show a drop in American crude supplies last week. Oil recovered some of yesterday’s 1.8% loss as the dollar fell to a six-week low, spurring demand for commodities.

The November contract on the New York Mercantile Exchange rose as much as 63 cents, or 0.8%, to US$75.60 a barrel, and traded for US$75.36 at 10:52 a.m. London time. Yesterday it lost US$1.22.

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