Gold Jumps to Another Record

Source:

"Gold ended September notching 11 record highs."

Gold surged to another record Friday, pausing for a brief dip following the release of the U.S. purchasing managers index, as the dollar weakened and investors sought bullion as an alternative to currencies.

Midmorning, gold for December delivery was trading at $1,319.70/oz. on the Comex—up $10.20 from Thursday.

Gold closed with a mild loss in the previous session, but ended September notching 11 record highs and rising nearly 5% for the month.

Investors have favored gold amid market expectations of a second monetary stimulus from the Federal Reserve, which could further pressure the dollar.

As gold has risen, miners have increasingly bought back positions they had sold to hedge production, so as their shares more closely track gold prices. This has also fed the rally.

Physical demand for gold jewelry and coins remains strong, and retail investors have also increasingly sought out the yellow metal as a hedge against uncertainty and a store of value. Investor demand for gold, especially purchased through ETFs backed by physical metal, has grown to account for more than a third of the total market, according to GFMS estimates.

The International Monetary Fund said Thursday it sold 18.5 metric tons of gold in August, bringing IMF's gold sales to 106.8 metric tons in roughly a year.

"Including direct gold sales to central banks of 222 tons, this means that only 72.7 tons of gold remain up for sale from the original good 400 tons," analysts at Commerzbank said in a note Friday.

Silver also returned to a 30-year high. December silver added $0.18, or 0.8%, to $22/oz.

News that China's manufacturing accelerated pushed copper and other base metals higher. Copper for December delivery rose $0.05, or 1.4%, to $3.70/lb. A close along these levels would be copper's best since late July 2008.

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