SINGAPORE: Spot gold hit a record high above $1,589 on Thursday, buoyed by a sharp drop in the dollar after Moody's warned the US may lose its top credit rating, the possibility of more Federal Reserve stimulus and Europe's deepening debt crisis.
Spot gold rose to a record of $1,589.56 an ounce, before easing slightly to $1,586.44 by 0225 GMT. Gold was on course for its ninth consecutive day of gains, matching a similar winning streak in 2006.
US gold also hit a record at $1,590.80 an ounce. It was trading at $1,587.20, up 0.1 percent on Thursday.
Spot silver rose to $38.51 per ounce, the highest since May 31, before trading up 0.5 percent at $38.32, tracking gains in bullion and extending the 5.6 percent rise in the previous session.
US silver also rose 0.6 percent to $38.38.
"The dollar is lower and pushing up commodities across the board," said a Singapore-based trader. "Gold is targeting $1,590, then $1,600."
Investors sold off the dollar after Moody's added pressure to stalled US debt talks with a warning that the United States may lose its top credit rating in coming weeks.
A hint of further policy easing from the Federal Reserve added to dollar's woes. The Fed was ready to ease monetary policy further if economic growth and inflation slow much more, Chairman Ben Bernanke said on Wednesday.
The ongoing euro zone debt crisis added to gold's lustre. Fitch Ratings on Wednesday downgraded Greece deeper into junk territory, citing the absence of a new and fully funded financing program for the country.
COPYRIGHT REUTERS, 2011
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