Fri Jan 11, 2008 2:46am GMT Market News ... By Lewa Pardomuan
SINGAPORE (Reuters) - Gold hit a record high near $900 an ounce on Friday, driven by hopes of a half-point cut in U.S. interest rates later this month that could raise the metal's appeal as an alternative investment.
Spot gold rose as high as $898 before profit taking kicked in, mostly led by Japanese investors. It was later quoted at $890.90/891.70, still higher than $889.90/890.60 hit late in New York on Thursday.
COMEX gold futures also hit a record high, with the most active February contract GCG8 rising as high as $899.9 an ounce before slipping to $893.0, down $0.6 from Thursday's close.
"We are not talking about $900 now. We are talking about $1,000," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"Of course sentiment is really bullish, but I think the more bullish the market is, the more dangerous it is," he said.
Leung expected gold to trade in $885 to $900 range on Friday but said the market could succumb to heavy profit, especially given the extent of long positions held by funds.
Gold, which rallied more than 30 percent in 2007, entered the new year on a firm note, rising more than 7 percent on a trail of market-friendly factors including a struggling dollar and record high crude oil prices.
The dollar held near a five-week low against the euro after U.S. Federal Reserve Chairman Ben Bernanke said the central bank was ready to take "substantial" measures to shore up a slowing economy. Continued...
MON Price at posting:
0.0¢ Sentiment: ST Buy Disclosure: Held
