Gold, Silver and Other PMs: Gold Trades Near 18-Year High on Talk of Central Bank Buying

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Gold Trades Near 18-Year High on Talk of Central Bank Buying

Nov. 22 (Bloomberg) -- Gold traded at its highest level in almost 18 years in Asia as investors bought the precious metal amid speculation central banks may add to their reserves and jewelers stocked up to meet rising demand.

Russia's central bank may double its gold reserves, Maria Guegina, the bank's head of external reserves, said Nov. 15, while the central banks of South Africa and Argentina have said they may also increase their gold holdings. Gold may reach $500 an ounce, UBS AG said, up from a close of $491.76 yesterday.

``Gold settled at its highest mark in nearly 18 years, boosted by speculator buying, as the market eyes a move to the psychological level of $500 an ounce,'' David Thurtell, a commodity strategist at Commonwealth Bank of Australia, said in a report today. ``Talk of central bank buying and stronger retail interest also boosted the market.''

Gold for immediate delivery rose as much as $1.01, or 0.2 percent, to $492.76 an ounce, the highest since December 1987. It traded at $492.36 at 11:32 a.m. Sydney time.

``In addition to the speculative interest relating to the $500 level, gold found support on talk of stronger retail interest in the precious metal and central bank reserve additions,'' NM Rothschild & Sons (Australia) Ltd. said in an e- mailed report today.

Gold for December delivery rose as much as $3.70, or 0.8 percent, to $493.20 an ounce in after-hours trading on the Comex division of the New York Mercantile Exchange. It traded at $492.50 at 11:32 a.m. Sydney time

-- posted by permabear