Gold sets record high as new reports stir investor worries about economy; dollar weakens

Gold prices set record high on economic worries

Gold prices were driven to a record high Thursday as worries returned about sluggish economic growth.

Gold for December delivery added $5.10 to settle at $1,273.80 an ounce, which was a record high. Earlier in the day, it traded as high as $1,279.50 an ounce. It was the second time this week gold has set a record high, and some analysts believe the price could top $1,300 an ounce.

New government reports signaled snail-like job growth and uneven manufacturing activity. In addition, the dollar grew weaker against other currencies. Combined, the developments prompted investors to buy gold, which is often seen as a safe place to park money.

“We’ve been bombarded with a lot of mixed signals,” Matt Zeman, head trader at LaSalle Futures Group, said. “In the end, housing and jobs still have not really turned the corner, so to speak. I think while people remain mildly optimistic, there still is a lot of investor angst out there.”

The other development that boosted gold was the weaker dollar. That can make commodities, which are priced in dollars, more lucrative for foreign investors.

“As the euro made new highs, I saw gold making new highs and I think there’s a direct correlation there,” Lind-Waldock senior market strategist Rich Ilczyszyn said. “Maybe it’s the purchasing power of investors abroad.”

Gold’s rise gave a boost to silver, which closed at a high for the year. Most metals also settled higher.

Silver for December delivery rose 20 cents to settle at $20.771 an ounce. December copper added 2.7 cents a pound to settle at $3.4935 a pound; October platinum rose $6.60 to $1,611.90 a pound while September palladium lost $10.20 to $546.95.

In other trading, wheat prices fell after the government said net exports fell from the previous week. December wheat contracts lost 7.5 cents to settle at $7.1925 a bushel.

Corn prices extended their gains a day after reaching a two-year high because of uncertainty about production levels during this year’s harvest season. December corn added 0.75 cent to settle at $4.96 a bushel.

November soybeans for November delivery fell 6.25 cents to settle at $10.3625 a bushel.

Crude prices dropped after new government data signaled slower demand for oil and gas.

Benchmark oil fell $1.38 to settle at $75.74 a barrel on the New York Mercantile Exchange.

Natural gas prices rose after the government said stockpiles held in underground storage in the lower 48 states increased by 103 billion cubic feet to 3.267 trillion cubic feet for the week ended Sept. 10. The total is6.2 percent more than the five-year average.

Natural gas rose 6.7 cents to settle at $4.062 per 1,000 cubic feet on the New York Mercantile Exchange.

In other Nymex trading in October contracts, heating oil gave up 4.26 cents to settle at $2.0990 a gallon and gasoline fell 3.78 cents to $1.9247 a gallon.