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Thursday, April 28, 2011

Gold Hits New Records, Silver Rising In Asia Market

Gold Hits New Records, Silver Rising In Asia - Gold, silver Prices Market April 28 2011, Analysts, silver prices, : Precious metals took flight again in Asian trade Thursday, as investors interpreted U.S. Federal Reserve chairman Ben Bernanke's first-ever news conference as indicating further weakness in the dollar and the prospect of higher-than-usual inflation.

Spot gold hit new records during Bernanke's press conference and notched fresh highs during Asian trade, peaking at $1,533.40/oz.

Silver contracts traded on the Comex futures market saw immense turnover and moved up to challenge levels reached during the commodity's most recent price spike on Monday.

At 0705 GMT, spot gold was at $1,531.20 a troy ounce, up $3.90 from its late New York level, while silver was 37 cents higher at $48.14/oz. Platinum lost $5 to $1,819/oz while palladium gained $3 to $767/oz.

The strength of investment demand suggests prices are sustainable in the immediate term, said Ben Westmore, a commodities analyst and economist at National Australia Bank in Melbourne.

"It's definitely not supported by the fundamentals, but the uncertainties that are around won't abate overnight. There will be a risk premium in these markets for an extended period, so we don't think there's going to be a quick reversal of these prices although I do think they probably are a bit frothy," he said.

On Comex, the rollover to a new July silver contract saw huge volumes traded, with 127,848 lots changing hands on open interest of 79,326, meaning each lot was being traded 1.6 times over the course of the day. The contract rose as high as $48.78/oz before falling back to $48.04/oz around 0705 GMT.

Bernanke's press conference was a departure in the communications policy of the U.S. central bank, a situation that in the past has provoked volatility in the markets.

Analysts mostly argued that he had handled the event well. Meanwhile, his promise to continue the Fed's zero interest-rate policy for an "extended period" gave cheer to gold investors.

The main cost of holding gold comes from borrowing and storage costs, and when interest rates move above 2%, investment demand for the commodity is perceived to drop significantly, although some markets, such as China's, have seen booming demand in recent years, despite rising interest rates.

The U.S. dollar index, another key driver of the price of precious metals, continued its drop after the speech, falling to within 3% of its all-time low just before the 2008 global financial crisis. A weaker dollar tends to boost prices of all dollar-denominated commodities. For the latest updates PRESS CTR + D or visit Stock Market news Today

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