Dow at 3-year high as gold passes $1,500

Julian Harris
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GOLD soared to over $1,500 (£914) an ounce for the first time in history yesterday, as the rush to “safe havens” continued amid fears over global inflation and economic uncertainty.

Yet the knock to US confidence from this week’s Standard and Poor’s negative outlook seemed to be forgotten already on Wall Street, as the Dow Jones surged 186.79 points to close at 12,453.54 – its highest level since June 2008. The technology-focused Nasdaq index, meanwhile, had its biggest one-day jump in six months boosted by strong technology firm results.

A rebound in home sales in March announced by the National Association of Realtors (NAR) boosted confidence, along with a raft of solid earnings and profit outlooks.

“It isn’t just the good reports, but also the encouraging comments about how things look for the remainder of the year,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Spot gold hit a high of $1,505 as mounting evidence of increasing inflation in major Asian economies was echoed in Latin America. Silver also continued its rise, rising to $44.79 an ounce during the day.

“There is an awful lot of bad news in the price,” said Simon Weeks of the Bank of Nova Scotia. “The S&P comment the other day has given us the final kicker to get up here.”

The dollar continued to sink, threatening to drop below 2009’s lows of 74.17 in the US Dollar Index. The Australian dollar soared to an all time high against the US dollar, stretching beyond $1.06.

FAST FACTS | world markets

Spot gold hit a high of $1,505.40 an ounce.

Silver hit a high of $44.79 an ounce.

The Dow Jones Industrial Average closed at 12,453.54 – its highest level since June 2008.

The dollar sank below 75 (US Dollar Index).