Friday, March 14, 2008

Gold hits $1,000 for first time

The price of gold reached a record, trading at $1,000 an ounce for the first time, pushed higher by a weak US dollar and fears about the US economy.

Concerns about a possible US recession are seeing investors buy up commodities such as gold as an alternative to company shares and the US dollar.

Since the beginning of the year the value of gold has increased by about 20%, after it rose 32% in 2007.

Gold eventually settled for the day at $993.80, up $13.30 an ounce.

Analysts say gold will stay high as long as dollar and growth fears remain.

"Every bit of bad US economic data boosts gold in two ways," said Fortis Bank.

"First because it reinforces the return of its role as a safe-haven asset, and second because the dollar falls on expectations of further Federal Reserve rate cuts."

Gold is measured and sold in troy ounces. One troy ounce equals 31.1035 grams or 480 grains. One troy ounce is equal to 1.09711 avoirdupois ounce - those widely used to measure weights in the US and UK.

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