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Tuesday 17th of November 2009
November 16, 2009    

Soaring gold prices sends FTSE to 2009 high

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by Kay Murchie
Soaring gold prices sends FTSE to 2009 high

London’s FTSE 100 rose to its highest level this year after the price of gold hit a fresh record high today of $1,132.95 an ounce.

Increasing demand from emerging markets has been pushing up the price of the precious metal over recent weeks.

Furthermore, gold traditionally rises during the October to December period as the run-up to Christmas and the Indian festival of Diwali pushes up demand.

The rise of the price of gold was also attributed to a weakening US dollar, which typically moves in the opposite direction to the precious metal.

Shortly after the FTSE 100 opened, gold specialist Randgold Resources gained 204p to £49.06, while Rio Tinto and Xstrata both saw increases of 119.50p and 38p respectively.

The FTSE reached 5,332.92 - its highest point of the year so far.

Catherine Gignac, a managing director of mining research at Sandfire Securities in Toronto, said: “The strength in the gold price is demand-driven, mainly as an alternative to the dollar.”

Other miners to rise on the FTSE were Lonmin, rising 51p and Antofagasta, the Chilean producer, up 22.5p.

In the meantime, oil clawed back some of last week’s losses with London Brent crude rising almost a dollar to $77.24.

US crude futures for December delivery gained $1.06 to $77.41 a barrel today.

This boosted Cairn Energy and Petrofac which gained 44p and 15p respectively.

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