Tuesday, May 09, 2006

Gold passed the $700 mark

U.S. benchmark gold futures closed on Tuesday at a 25-year high, above $700 an ounce, driven by relentless investor buying on geopolitical tensions and traders' expectations of further price gains ahead.

Market talk that economists urged China to quadruple its gold reserves to 2,500 tonnes from the current 600 tonnes because its foreign exchange reserves had become the world's largest also stoked the gold rally, dealers said.

A jump in spot gold, record-high platinum and soaring copper and aluminum prices amid a boom in precious and industrial metals contributed to the 3.2 percent rise as well.

"I think that platinum helped gold more than anything else," said a gold trader at a precious metals refiner in New York. "But that China story certainly helps."

June delivery gold on the New York Mercantile Exchange's COMEX division settled at $701.50 an ounce, up $21.60 on the day.

NEW YORK (Reuters)

Investors and gold mining companies are certainly enjoying the day.

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