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Gold sets new record as dollar falls further

Posted by seumasach on November 26, 2009


26th November, 2009


Gold hits a record high for the third time this week as the dollar index falls to its lowest in 15 months, stimulating investors to find an alternative.

Gold advanced to a record high of around $1,195 an ounce, raising hopes that central banks would jump in to buy more gold in their effort to evade a falling currency.

US December gold futures GCZ9 also increased to a fresh high of $1,195 per ounce, with demand stimulated by expectations of further reserve diversification and fears about inflation in 2010.

The growth took gold price gains to around 15 percent since the beginning of November.

Sri Lanka bought 10 metric tons from the International Monetary Fund for about $375 million, the bank said Wednesday in Washington, following India, Russia and Mauritius in the rush for gold.

“Everybody is bullish on gold, and everybody is looking at the signal central banks are sending,” said Dick Poon, manager of precious metals at Heraeus in Hong Kong.

“It’s not just India or China, but most of the central banks, as well as funds, have changed their portfolios to include gold. So, everybody is looking at how much money they will invest in gold,” he said.

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