Gold Jumps Above $900

Gold surged 2 percent to trade above $900 on Thursday and platinum hit a historic high, as investors snapped up the metals on dollar weakness and firmer oil prices, analysts said., Reuters 1/24/2008 6:53:41 AM

Expectations of a further rate reduction by the U.S. Federal Reserve after hefty emergency cuts this week also boosted market sentiment, they added.

Spot gold hit a high of $902.90 an ounce and was quoted at $900.60/901.30 at 8:33 a.m. EST, against $884.75/885.45 late in New York on Wednesday and this week's three-week trough below $850. It hit a record high of $914 on January 14.

The euro strengthened against the dollar after tough talk on inflation from European Central Bank policymaker Axel Weber dampened expectations of a possible near-term interest rate cut.

The euro had come under selling pressure in recent weeks as signs emerged that weakness in the U.S. economy is having a knock-on effect on the euro zone, fuelling the argument for a rate cut by the European Central Bank.

A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.