19 Nov 2009 12:26

Domestic gold prices continue to glitter on global trend

Shanghai. November 19. INTERFAX-CHINA - China's gold prices on the Shanghai Futures Exchange (SHFE) recorded a new all-time high of RMB 251.76 ($36.87) per gram on Nov. 19, hot on the heels of record high prices on the international market overnight, according to the SHFE.

The most-traded December gold contract on the New York Mercantile Exchange and Commodity Exchange (COMEX) soared to $1,153.4 per ounce on Nov. 18, marking a new historical high. The contract closed at $1,143.7 per ounce on Nov. 18, up 0.25 percent from the previous trading day.

This led gold futures on the SHFE to surge to a new high, with the most-traded June contract closing at RMB 250.26 ($36.66) per gram on Nov. 19, up 0.31 percent from the previous trading day.

Wang Ruilei, an industry analyst from Chinese gold trader Chengdu Gaosaier Gold and Silver Co. Ltd., said that international gold prices jumped due to speculative fund purchases, the United States' bearish economic data and inflation concerns.

Wang explained that on Nov. 18 the U.S. Federal Reserve said that interest rates may not rise until 2012 from the current record low, which prompted more speculative funds to come into the market and push up gold prices.

Home construction in the United States unexpectedly plunged in October by 10.6 percent, its lowest level since April, which stirred concerns over the countries economic recovery, while the higher-than-expected U.S. consumer prices caused inflation worries.

Gaosaier predicts that gold prices in the short-term are unlikely to see significant falls, but may fluctuate between $1,120 per ounce and $1,140 per ounce.