Gold News & Info

Source: Marketwatch

San Francisco—

Gold and silver futures struck fresh multi-decade highs Thursday morning, and copper set a record, as dollar weakness reignited the rally in commodities.

"Anyone still not yet on board the secular bull market in precious metals are being left in the dust," said Peter Grandich, editor of the Grandich Letter.

"A coming crisis in the U.S. dollar will only add more steam to the engine," he said.

Gold for June delivery traded as high as $591.20 an ounce on the New York Mercantile Exchange, the loftiest level for a lead-month contract since January 1981.

Silver for May delivery rose as high as $11.51 an ounce, its highest level in 22 years, and was last trading up 35 cents at $11.465 an ounce.

May copper added 2.55 cents to $2.464 a pound, having earlier traded at a record $2.465 a pound.

July platinum rose $12.10 to $1,100, nearing the price record for any contract month, which was set at $1,189.50 on March 5, 1980, according to NYMEX.

June palladium was also up $16.10 at $353.50 an ounce.

The dollar was last trading down 0.4% against the yen, as traders re-evaluated the Federal Reserve's statement following its policy meeting on Tuesday, at which it hiked rates and promised more increases to come.

Economists at Action Economics said the strong gains in base metals of the past several sessions had sparked a surge in demand from fund managers looking for asset classes offering higher returns.

Gold also found support in safe-haven buying after Iran rejected a United Nations Security Council call to cease uranium enrichment, sending energy prices higher. Ministers representing five western governments will meet today in Berlin to discuss the next steps to be taken against Iran and its nuclear program.

Gold was also benefiting from silver's rally. Silver has shot higher in the past several sessions amid excitement about an exchange-traded fund from Barclays that's expected to launch shortly.

The ETF will be backed up by physical supplies of silver, just as gold ETFS are backed up by bullion held in a vault.

"With the copper markets and some of the base metals seeing a positive flow of buying interest lately and the U.S. stock market hinting at even better economic conditions ahead, the overall environment for metals is supportive," said Nell Sloane, an analyst at NSFutures.com, in daily commentary.

And "seeing the copper market rise sharply into new high ground this week, means that silver is getting support from both gold and copper or in other words from the precious and industrial metals aspect," she said.

Copper got an added boost after Morgan Stanley increased its copper price forecast, predicting it will stay above $2 a pound until 2008.

"We could see the spot price move to the $2.60-2.80/lb range on a short-term basis," said analyst Wayne Atwell.

Morgan also upgraded copper and gold miner Freeport-McMoRan to equal-weight from underweight based on higher prices for copper. Shares of Freeport-McMoRan were last at $61.42, up 2.9%.

Kinross Gold saw its stock rise 4.5% to $11.05. The miner on Thursday reported a fourth-quarter loss of $154.3 million, or 45 cents a share, wider than a year-ago loss of $88 million, or 25 cents a share. The latest results reflect impairment charges of $147.2 million, and accruals for future reclamation obligations of $47 million.

Revenue from metal sales rose to $190 million in the latest three months from $179.2 million in the same period a year earlier. The average estimate of analysts polled by Thomson First Call was for a profit of 5 cents a share in the December period on revenue of $187.8 million.

Tracking the metals-mining sector as a whole, the Philadelphia Gold and Silver Index stood at 144.27, up 3.9%, and the CBOE Gold Index traded at 144.47, up 4.2% from Wednesday.

The Amex Gold Bugs Index tacked on 4.1% to stand at 344.4, trading at its highest level since early February.