Gold hits record above $1,300, silver at 30-year peak

LONDON (AFP) - Gold soared to a record high above 1,300 dollars on Friday, dragging sister metal silver to a 30-year peak as investment demand propelled precious metals higher. Gold prices struck a record 1,300.07 dollars an ounce in afternoon trade on the London Bullion Market as investors sought a safe-haven for their money amid increased uncertainty over the global economic outlook. Silver, meanwhile, jumped to 21.44 dollars an ounce its highest level since September 1980. The underlying bullish trend in the gold market continues to be fuelled by the high level of uncertainty regarding the US and European economies, said SEB Commodity Research analyst Filip Petersson. Wealth preservation are the keywords. As long as we do not see a reduction in the uncertainty regarding the long-term economic outlook, gold prices will remain well-supported as the currency of choice for risk-averse investors. He added that the strategic view remains bullish (positive) and we expect prices above 1,350 dollars per ounce before the end of the year. Gold and silver were also driven by particularly keen demand from exchange traded funds (ETFs). ETFs allow traders to invest money more easily in commodities, without trading on the futures market. They are traded like shares and are widely regarded as an inexpensive and low-risk way of investing. Gold is fuelled by a combination of things, said Commerzbank analyst Daniel Briesemann. High investment demand can be seen in inflows into gold ETFs, added Bries-mann. Some central banks in Asia are also diversifying their currency reserves further, even at the current high price levels. Furthermore, the general interest of investors is not waning and gold is sought for mainly as a 'stable currency. Gold also won support from the weakening US currency, which makes the dollar-priced metal cheaper for buyers using stronger currencies and so tends to stimulate demand and prices. Since this time last year, gold and silver prices have soared by about 30 percent. Poor mans gold shines again, said analyst Andrey Kryuchenkov at financial services firm VTB Capital in response to silvers 30-year high. Kryuchenkov also noted that silver enjoyed robust investor demand and industrial demand the metal is widely used in the manufacturing sector, as well as to make jewellery.

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