9 December 2005, 09:41 Gold keeps its shine, tops $520 an ounce
Gold prices topped $520 an ounce for the first time since April 1981 on Friday, pushed up by fund buying and interest in Tokyo futures before some investors opted to take profits, paring some of the early gains.
With gold's tight supply, healthy global demand, worries about inflation and growing fund interest in precious metals and other commodities, speculative buying has defied analyst warnings that the bullion market was overbought.
Spot gold rose to $520.40/521.20 an ounce by 0440 GMT, against $519.50/520.30 last quoted in New York on Thursday. Earlier, gold hit a 24-1/2-year high of $522.70.
"There's some profit-taking now, but look at where we are," said Darren Heathcote, head of trading at N M Rothschild in Sydney. "It's broken $520, the target we had yesterday ... looks like $525 is the next target."
A rise in oil prices, rekindling inflation concerns, and aggressive Japanese buying supported gold, which is used in jewelry and as an investment.
"It's dizzy high, and we're looking at a very overbought market," Heathcote said. "We're looking for a correction. It has to come at some point. However, given where oil is, it may well give some support on the downside."
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