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Friday, 25th November 2005 (7993 views)

Traders are preparing for gold to shatter the symbolic $500 per ounce barrier next week for the first time since 1987.

The price of gold soared again today, hitting a new 18-year peak as cautious investors continued to plump for precious metal amid concerns over inflation and geopolitics.

Despite picking up as a result of feverish activity in Japan, the price of the yellow metal is still a fraction shy of the target at $496.75.

However, commentators expect it to surge past the $500 mark next week when the US resumes trading following a break for Thanksgiving.

'I think next week will be very busy, with people gearing up for $500 gold,' RBC's David Holmes told the Financial Times.

The huge psychological barrier represented by the $500 mark should not be underestimated.

The price of gold bullion last peaked above the symbolic marker in December 1987 for just one day and has yet to return to such highs.

It is not just the growing weight of gold as a currency lifting the precious metal towards 1987 levels, with gold jewellery flying off the shelves from New York to Shanghai.

'Gold is loved so much by everybody at the moment, it is hard to say anything bad about it,' added Mr Holmes.

 

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