Gold hits record high in euros, sterling

By Frank Tang

NEW YORK (BestGrowthStock) – Gold rallied to a six-week high in dollar terms and hit record highs versus sterling and the euro on Tuesday, as uncertainty about Greece’s debt and Britain’s politics lifted demand for bullion as a hard asset.

On the COMEX, the 1.7 percent gain was the sharpest in two weeks. Uncertainty over plans to tackle Greece’s fiscal crisis and over what the next British election may mean for UK debt have heightened volatility in the European currencies, lifting interest in gold as an alternative asset, analysts said.

“Currency volatility is by far the biggest factor supporting gold on Tuesday,” said Frank McGhee, head precious metals trader at Chicago-based Integrated Brokerage Services.

Gold has traditionally been used as a safe haven in times of economic and political uncertainty, as the metal’s intrinsic value is not dependent on any paper currency.

Spot gold was at $1,133.30 an ounce at 3:23 p.m. EST (2023 GMT), against $1,118.40 late in New York on Monday.

U.S. April gold futures on the COMEX division of the NYMEX settled up $19.10, or 1.7 percent, at $1,137.40 an ounce.

Euro-denominated gold hit a record high of 836.72 euros an ounce, up from 823.66 euros late on Monday, while gold priced in sterling touched a record 759.86 pounds an ounce, up from 744.85 pounds.

“Gold denominated in euros has definitely outperformed the drop in euro-dollar by almost 1 percent in the last 10 days,” said Mitsubishi Corp precious metals strategist Tom Kendall. “That does reflect some nervousness about stability of sovereign debt, and stability of the euro itself.”

The euro rebounded from a 9-1/2-month low against the dollar as investors awaited new plans to address Greece’s debt crisis.

Greek Prime Minister George Papandreou said his country was fighting for survival against bankruptcy and urged civil servants and pensioners to accept sacrifices to save the debt-burdened nation.

Fears over the fiscal health of peripheral euro zone economies have weighed heavily on the euro so far this year, knocking it down by more than 5.5 percent against the dollar.

STERLING GOLD HITS HIGH

Sterling-denominated gold rose as the British currency was driven lower by fears that the next UK general election could result in a hung parliament.

That could mean an incoming government would struggle to take the action necessary to reduce debt, analysts said.

“Markets fear the UK government will be forced to create more sterling in order to buy their own government bonds and that quantitative easing and debt monetization may continue for longer than expected,” and that could lead to further gains in gold, bullion dealer GoldCore said in a note.

Silver tracked gold higher to hit a five-week high at $17.06 an ounce, and was last at $16.89 an ounce against $16.45.

Platinum was at $1,566 an ounce versus $1,546.50, and palladium at $440 an ounce versus $433.50.

Platinum group metals held initial gains even as U.S. auto sales stalled in February as a safety crisis sent Toyota Motor Corp (7203.T: )(TM.N: ) reeling and cleared the way for Ford Motor Co (F.N: ) to take the industry’s top spot by sales for the first time since 1998.

Close Change Pct 2009 YTD

Chg Close % Chg US gold 1137.40 19.1 1.7 1096.20 3.8 US silver 17.064 0.595 3.6 16.845 1.3 US platinum 1576.00 32.00 2.1 1471.00 7.1 US palladium 444.85 6.85 1.6 408.85 8.8

Prices at 3:40 p.m. EST (2040 GMT) Gold 1132.85 14.45 1.3 1096.35 3.3 Silver 16.88 0.43 2.6 16.84 0.2 Platinum 1567.50 21.00 1.4 1465.50 7.0 Palladium 440.00 6.500 1.5 405.50 8.5

Gold Fix 1126.50 10.50 0.9 1104 2.0 Silver Fix 16.57 7.00 0.4 16.99 -2.5 Platinum Fix 1562.00 13.00 0.8 1466 6.5 Palladium Fix 439.50 1.50 0.3 402 9.3

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(Additional reporting by Michael Taylor and Jan Harvey in London; Editing by Alden Bentley)

Gold hits record high in euros, sterling