Source: MarketWatch
San Francisco— Gold futures climbed above $575 an ounce Tuesday, a fresh 25-year high, and silver prices reached 1984 levels as Iran appeared closer to a referral to the United Nations' Security Council amid concerns about the nation's recently resumed nuclear-research program.
Metals traders also awaited the Federal Open Market Committee's decision on U.S. interest rates, due at 2:15 p.m. Eastern time — shortly after metals trading closes in New York.
"As the Fed-watchers are keeping a keen eye on Mr. Greenspan's farewell gesture to the dollar, and as the watchers of mounting global instability are keeping a keen eye on gold's presence in their basket of assets, gold continues its energetic blossoming from former wallflower to an unstoppable powerhouse," said Jon Nadler, investment products analyst at bullion dealers Kitco.com.
Gold for April delivery traded as high as $575.20 an ounce on the New York Mercantile Exchange, the highest futures level since January 1981. The contract was last up $4.30 at $574.90.
Overnight, the United States, the United Kingdom, France, Russia and China all agreed that the Security Council in March should consider Iran's situation, which could result in punitive action.
Russia surprisingly backed the move after long resisting a referral, though it's unclear whether Russia would back Security Council sanctions against Iran.
Meanwhile, the Tehran government said a referral would mean the end of any attempt to find a diplomatic solution to the crisis. Oil-rich Iran has consistently denied claims that it's aiming to create nuclear weapons, arguing that its research is solely aimed at generating energy for civilian purposes.
Silver shines
At the same time, March silver climbed as high as $9.915 an ounce, an intraday futures level not seen since April 1984. It was last up 9.5 cents, or 1%, at $9.87.
Looking ahead, Kitco.com's Nadler expects "great feats from silver in coming months and years."
Still, he is "fully aware that the white metal is primarily an industrial commodity (albeit one gifted with more than a few historical monetary attributes) and that its fate is inexorably tied to copper production, as well as hopefully, continuing strong demand from Asian countries.
When it comes to buying precious metals "as an insurance policy … silver does make sense once the core gold allocation has been accounted for," he said.
"As the monetary role of silver tends to reassert itself during gold bull markets, and the spill-over effect ('poor man's gold') takes hold in the investment community, silver also shines — and then some," he added.
Golden support
Meanwhile, "the longer-term fundamentals are supportive for gold, given forecasts for strong demand from the major emerging economies together with constrained output levels," said economists at Action Economics.
It "seems as if currencies are all falling with a measure of orderliness against all key commodities, and those with a monetary capability such as gold and silver," said Julian Phillips, an analyst at GoldForecaster.com.
The dollar was under pressure as investors awaited the FOMC decision.
Also in metals, April platinum headed higher for a seventh session in a row, up $6.90 to reach $1,086 an ounce after tapping $1,086.50 — a record level for a front-month contract. The previous record was $1,085, though the all-time high for any contract month was $1,189.50 — both levels reached on March 5, 1980, according to Nymex.
Sister metal palladium saw its March contract add $11.50 to $295.50 an ounce. March copper slipped by 1.95 cents to $2.21 a pound.
On the supply side, copper inventories were down 150 short tons at 11,608 short tons as of late Monday, according to Nymex.
Gold supplies were unchanged at 7.32 million troy ounces, while silver stocks were flat at 124.7 million troy ounces.
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