NEW YORK (
TheStreet) -- Gold for December delivery hit an all-time high of $1,087 an ounce on Tuesday, as investors shrugged off a stronger U.S. dollar and cheered buying from India.
Gold delivery for December was rising $31.10 to $1,085.10 an ounce at the Comex division of the New York Mercantile Exchange. The contract has traded as low as $1,055.50 and as high as $1,087.
Silver followed suit and was popping 75 cents to $17.20 and copper prices were flat at $2.96.
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Gold: The Right Trade
Gold surged on news that the Reserve Bank of India bought 200 tons of gold from the IMF for $6.7 billion, around $1,045 an ounce. Historically, fall is a strong buying season for India, but many analysts were concerned that Indian consumers would temper their purchases as gold hit record highs. India now holds 6% in gold reserves which is still considerably lower than the 20% of gold reserves it held in 1994. Gold has been trading in close opposition to the U.S. dollar, but as the U.S. dollar index rose to $76.41, gold ignored the currency to focus on bullish demand.
The IMF still has 203 tons to sell, but probably won't sell the gold in the open market. Rumored buyers are China, Russia and Brazil. Reserve Bank of India's purchase will help drive gold prices higher, Bulliondesk.com analyst James Moore writes in his daily metals report.
"Having seen gold consolidate and with dips continuing to draw strong support, gold could be poised to make a fresh challenge to the upside as the
Reserve Bank of India purchase announcement clears some of the overhanging resistance." India's huge purchase could lead to new buying from retail investors who were waiting to jump into the market.
In mining stocks, shares of
Kinross Gold (KGC) were down 1% to $18.22 after the company reported a 16% jump in revenues due to higher spot prices, but a loss of 3 cents a share. Gold production in the third quarter fell 3% as compared to the same period last year. The company had already revised its 2009 gold production forecast to 2.2 million ounces due to production issues as its Paracatu mine.
Hecla Mining (HL) was popping 14.60% to $4.71 after the company reported net income of $22.5 million. Hecla is one of the leading silver producers in the U.S. and production rose over 8% in the third quarter. Shares of
Barrick Gold (ABX) and
Newmont Mining (NEM)were both surging to $39.04 and $46.44 respectively.
Shares of
SPDR Gold Shares (GLD) were up 2.31% at $106.37.
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Written by Alix Steel in New York.
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