New record for gold price at $923 Friday, 25 January
2008, 17:17 GMT
The price of gold has set another record high,
reaching $923 an ounce, after power cuts in South Africa closed
mines and fuelled supply fears.
The metal was also boosted by the rise in oil prices. New
York crude jumped $1.19 a barrel, extending heavy gains on
Thursday to trade close to $91.
Gold is seen as an attractive investment in
times of economic uncertainty and oil-led inflation.
Gold prices increased by more than 30% in
2007 and further gains are forecast.
Gold rush
Since the start of the year, the gold price
has set a series of records, as many companies have predicted
weaker earnings and global lending markets remain troubled.
Worries that the dollar will remain weak as
a result of further US interest rate cuts are another factor
behind the gold rush.
JP Morgan analysts forecast in a note to clients
that gold could reach between $950 and $975 this year.
"Precious metals is a very strong picture,"
said Graham Birch, head of BlackRock's Natural Resources fund.
The rally was exacerbated by the suspension
of production at some of the world's biggest gold mines in
South Africa, after the country's state power supplier, Eskom,
said it could not guarantee supplies.
Eskom said the power crisis would last for
four weeks, but many observers expect the problems to persist
for many years.