Gold Tops $1,000 for First Time in Nearly a Year

Source:

"Gold futures topped the key $1,000 mark for the first time in nearly a year on Friday. . ."

Gold futures topped the key $1,000 mark for the first time in nearly a year on Friday, as global financial and economic worries boosted the safe-haven appeal of the precious metal.

In recent action, gold for April delivery traded at 1,000.30 an ounce, up $23.80, or 2.4%, on the day. It earlier touched a high of $1,001.

Stocks fell to fresh bear-market lows on Wall Street, with the Dow Jones Industrial Average off more than 138 points, or 1.9%, at 7,326, and the broad S&P 500 index down 15 points, or 2%, at 763.

"There is a risk here of a panic sell-off in stock markets and the next leg down in the stock bear market looks imminent, as the ills of the global financial system virulently infect the global economy," said Mark O'Byrne, executive director at Gold and Silver Investments Limited, in a research note. "While gold has become overbought in the short term, its medium and long term fundamentals are as sound as ever."

Gold for February delivery, the front-month contract which registered very little volume, was last up $23.30, or 2.4%, at $999.40 an ounce on Globex. The February contract expires on Feb. 25. Earlier, February gold hit an intraday high of $1,000.40 an ounce. With markets lacking a clear direction since the passage of the U.S. economic stimulus and bank rescue plans, many analysts see a short-term return to risk aversion, which should continue to benefit gold.

"However, we expect a short period of consolidation before prices embark on a test of the all-time high at $1033.90," said Tom Pawlicki, precious metals analyst at MF Global.

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