Gold hits $1,000/ounce in New York

Credit-market turmoil, $ weakness spur buying; prices touch Rs 13,100 per 10 grams in Delhi.

Gold traded at $1,000 an ounce for the first time in New York as credit-market turmoil spurred demand for bullion as a haven from falling stocks and the dollar.

Silver, platinum and palladium also advanced as the dollar fell below 100 yen for the first time since 1995 and to a record low against the euro. Carlyle Group's mortgage-bond fund moved a step closer to collapse. Gold climbed 19 per cent this year in New York as the dollar fell and world equity markets declined.

``The financial system's in trouble at the moment and people are going to the safety of gold,'' said Mario Innecco, a futures broker at MF Global in London. ``You can't create gold so easily as you can create dollars or euros or pounds.''

April futures climbed $19.50, or 2 per cent, to $1,000 an ounce on the Comex division of the New York Mercantile Exchange. The contract was trading at $997.30 as of 9:25 am local time.

Gold's all-time inflation adjusted record is $2,224 on January 21, 1980, according to a calculator on the website of the Federal Reserve Bank of Minneapolis.

Prices in 1980 rose as high as $850 after US inflation was running in the double digits and oil was climbing after a decade of West Asian instability. In the New Delhi bullion market, the yellow metal zoomed by Rs 220 to set a new peak at Rs 13,100 per 10 grams.

Gold is the "anti-dollar," JPMorgan Cazenove analysts including Fraser Jamieson wrote in a report this week, raising their gold price forecast to $910 an ounce this year from $720.

Spot Gold Gains
Gold for immediate delivery rose $12.17, or 1.2 per cent, to $995.10 an ounce as of 1:10 p.m. in London after earlier reaching $997.65, exceeding the all-time high of $992.05 set last week.

"We remain long of gold and short of equities,'' US trader and economist Dennis Gartman wrote in his daily Gartman Letter on Thursday. A ``long'' is a bet on higher prices and ``short'' is a bet on a decline.

"The trend is so clear that we are adding to our long gold/short equity trade this morning,'' Gartman wrote.

Once gold goes over $1,000, it will continue rising, said MF Global's Innecco.

Assets in the StreetTracks Gold Trust, the biggest exchange- traded fund backed by gold, were unchanged yesterday at 652.5 metric tons, compared with the record 654.9 tonnes on March 10.

Platinum Advances
Platinum climbed $29.35, or 1.4 per cent, to $2,097.35 an ounce, rising for a fourth day. An increase in power supplies in South Africa, the world's biggest producer, will provide mines with 95 per cent of their power needs while cities may now face power cuts, the government said last week.

``There is a tension between the private consumer and big industrial user,'' said Allan Kerr, chief executive officer of Wogen Plc, the London-based trading company of metals including platinum. ``Do they dim the lights in the restaurants so they can produce ferrochrome? That sort of tension is still there I think.''

Palladium rose 75 cents to $504.75 an ounce and silver advanced 50 cents, or 2.5 per cent, to $20.66 an ounce.