Gold above $920/oz on record oil prices, weaker dollar

(AFX UK Focus) 2008-06-27 10:14

LONDON (Thomson Financial) - Gold continued to edge higher above $920 per ounce on Friday following strong gains in the previous session, with oil prices at record levels and weakness in the U.S. dollar boosting the precious metal.

At 9.45 a.m., spot gold was trading at $922.10 per ounce against $913.50 per ounce in late New York trades on Thursday. Gold has risen by around $45 since Wednesday's intraday low.

"The speed of the move and the combination of new highs in crude, renewed dollar weakness and further risk aversion make the risks biased to the upside for now," said UBS analyst John Reade.

With oil prices hitting new record highs above $142 a barrel, and weakness in the U.S. dollar, traders said investors were buying into gold as a hedge against the decline of the world's predominant form of currency reserves, and runaway inflation concerns.

Gold is also used as a store of wealth during times of economic turmoil, with investors turning to the precious metal for its safe-haven properties.

Other precious metals have tracked gold higher. Platinum was trading at $2,079 per ounce against $2,068 per ounce in late New York trades on Thursday. Palladium edged up to $471 per ounce against $468.50 per ounce, while silver climbed to $17.38 per ounce against $17.12 per ounce. d.sheppard@thomsonreuters.com ds1/cml/wj

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