Gold Rises to 27-Year High on Record Oil; Silver Advances

Source: Bloomberg  (10/16/07)

"The ETFs are actually driving the gold price because there's so much money going into ETFs," said David Hall, an analyst at the brokerage in Johannesburg. "If oil goes up, then you often see the gold price go up."

Gold gained to a 27-year high in London as rising prices for commodities such as crude oil spurred investors to increase their holdings of the metal.

The Reuters-Jeffries/CRB Index of 19 commodities yesterday closed at a 14-month high. Crude oil extended gains today to a record $87.13 a barrel. Investors have bought 2.7 million ounces of gold through exchange traded funds, or ETFs, in the past five weeks, half the increase for all of 2007, according to estimates by South Africa's Macquarie First South.

"The ETFs are actually driving the gold price because there's so much money going into ETFs," said David Hall, an analyst at the brokerage in Johannesburg. "If oil goes up, then you often see the gold price go up."

Gold for immediate delivery rose $4.59, or 0.6 percent, to $764.00 an ounce as of 9:26 a.m. in London after earlier trading at $767.09, the highest since January 1980...Silver advanced 2 cents to $13.84 an ounce.

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