Purchasing Gold

Bangkok gold price hits all-time high

Gold prices in Bangkok have surged to a record high upon concerns over renewed Middle East tensions and the weakening of the US dollar, according to an industry executive.

On Monday afternoon gold ornaments traded at 14,935.60 baht for selling, 15,650 baht buying for one-baht gold weight. Gold bar prices were 15,150 baht and 15,250 baht respectively.

Gold Trading Association president Jitti Tangsitthipakdee said the price of gold ornaments soared to a new high of 15,600 baht per one baht weight of gold when an undetermined number of investors moved their investments to the gold market in response to concerns over the confrontation between Iran and Israel.

The investors were also worried about the declining US dollar and economic troubles in the United States.

In addition, he said, the baht's weakening had fueled the value of gold in Bangkok, although the price of gold abroad stayed unchanged at around $960 per ounce.

Mr Jitti said the local price of gold ornaments is likely to continue to rise and pass 16,000 baht per one baht weight of gold this year if the baht continues to weaken. (TNA)

Gold Falls Below $750 on Dollar's Surge; Silver Plummets

By Pham-Duy Nguyen

Sept. 11 (Bloomberg) -- Gold fell below $750 an ounce, marking the longest slump in eight years, as the dollar's surge reduced demand for the precious metal as an alternative investment. Silver dropped to the lowest since June 2006.

Gold has tumbled 28 percent from a record in March as the dollar climbed 15 percent against the euro from an all-time low in July. The dollar today reached the highest in a year, and the Reuters/Jefferies CRB Index of 19 raw materials dropped to the lowest level since Jan. 24.

``This is indiscriminate slaughter across all commodities,'' said Ralph Preston, a futures analyst at Heritage West Futures Inc. in San Diego. ``It's indisputable that the funds rushed in to pump up prices, and now they're rushing out. This is a phenomenal run for the dollar. We're shorting the metals.''

Gold futures for December delivery fell $17, or 2.2 percent, to $745.50 an ounce on the Comex division of the New York Mercantile Exchange. The drop was the ninth straight, the longest slide since September 2000. Earlier, the price touched $739.80, the lowest for a most-active contract since Oct. 9.

Silver futures for December delivery fell 33.5 cents, or 3.1 percent, to $10.555 an ounce. Earlier, the price touched $10.21, the lowest since June 28, 2006.

Gold still has climbed 3.4 percent in the past year, while silver is down 18 percent.

Investment in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, has fallen 4.3 percent this week to 614.4 metric tons. The fund reached a record 705.9 tons on July 11.

Global Slowdown

Commodity indexes have fallen from records this year on concern that a global economic slowdown, triggered by the housing slump and the credit crisis in the U.S., will spread to other countries. Commodities are generally priced in the U.S. currency.

``It's certainly dollar-inspired liquidation for gold,'' said Stephen Platt, a commodity analyst at Archer Financial Services Inc. in Chicago. ``The U.S. will be slow to recover, and inflationary pressure will remain low because of weak demand. The U.S. slowdown is spreading and beginning to impact emerging-market economies.''

Gold, traditionally a haven from turmoil in financial markets, hasn't benefited from a plunge in equities, bank failures and rising geopolitical tension in the Middle East and Europe.

``The safe haven of choice is the dollar, not the metals,'' Preston of Heritage West said. ``When it comes to the buck, it's going straight up. I wouldn't dare pick a top.''

Gold, down 11 percent this year, is headed for the first annual decline in eight years. The record on March 17 was $1,033.90.

To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.

Last Updated: September 11, 2008 14:38 EDT