Gold breaches $800 barrier

Gold prices have this morning (November 1st) breached the $800 per ounce mark, capping a bull-run that has seen the precious metal soar since mid-August levels around $650.

Benchmark gold contracts for December delivery rose up to $802.50 an ounce in after-hours electronic trading, with activity this morning bring it back down below $800 again, but still in sight of 1980 record highs.

While 27 years ago gold reached as high as $875 per ounce, the recent recovery of the metal has occurred at remarkable pace, with people flocking to buy gold under a new belief in higher commodity prices.

Yesterday's rate cut from the Fed was no coincidence, with gold prospects rising as the US economy braced for a further quarter point interest rate slash, aimed at easing defaulting mortgage repayments.

Suki Cooper, precious metals analyst at Barclays Capital, identified other factors, however, in comments to Reuters.

"Higher oil prices could certainly be triggering inflation concerns in the minds of investors and speculators.

"The two key drivers are continued dollar weakness and oil price strength, and we are forecasting that both would move favorably for gold," she added, reinforcing the positive feeling among those looking to buy gold.