Gold Ends Week 6.4% Higher, Breaks New Records vs. Euro & Sterling as Financial Strains "Reach Crisis Proportions"

From Chris Mullen at GoldSeek.com...

Gold traded 1.5% to reach above $870 an ounce in London on Friday before it soared again in New York trade to end just off the day's high of $903.10 with an impressive gain of 4.3% for the session.

Gold Prices closed after-hours access trade just shy of $899.50, up more than $37 an ounce from Thursday and more than 6.4% higher for the week.

The US Dollar index reversed further early gains, which had been driven by weakness in other world currencies, but it ended slightly higher on worries over the impact of the large US stimulus package that is likely to be passed soon.

Treasury bonds fell as the Dow, Nasdaq, and S&P ended mixed after early losses.

The Gold Price in Euros rose to a new record high above €700 an ounce, up by €100 in the last month.

For UK investors, the Gold Price in Sterling ended the week almost 16% higher, breaking new record highs every day from Tuesday and touching £660 just before Friday's finish.

"With gold running strongly alongside a strong Dollar," writes Julian D.W. Phillips of GoldForecaster.com, "it appears that the strains on the currency market are reaching crisis proportions. The Pound Sterling in particular is falling too far too fast.

"Will it reach the One-Dollar level, or will Britain impose Exchange or Capital controls before then to halt what's left residing in Britain from leaving? Will the Bank of Japan act to halt the rise in the Yen? Will other central banks now be forced to act against exchange rates hurting their economies?

"It is this type of uncertainty that is lifting gold. As we have seen record demand for the shares of the Gold ETFs, it appears that institutional demand is at the forefront of the present heavy demand for gold.

"This demand is long-term."

Oil reversed early losses Friday and ended higher on rumors over more Opec oil cartel
production cuts and on the general rise in nearly all commodities.

Silver also rose, up 2% in London, but it then fell to see a loss of 1% by 10:30 in New York. Silver then jumped to catch up with Gold Bullion, gaining 5% for Friday;s session and closing the week 6.6% higher.

Platinum meantime gained $29 to $954 on Friday, and copper gained nearly 8 cents to about $1.46.

Gold Mining and silver equities rose roughly 10% by early afternoon before they pared their gains a bit mid-afternoon, but they then surged back higher into the close and ended with about 9% gains.

There were no major economic US reports Friday.

Next week's economic highlights include Sales of Existing US Homes and Leading Economic Indicators on Monday, Consumer Confidence and the S&P/CaseShiller Composite on Tuesday, a Federal Reserve interest-rate decision on Wednesday, Durable Goods Orders, Initial Jobless Claims, and New Home Sales on Thursday, and GDP, Chicago PMI, Michigan Sentiment, and the Employment Cost Index on Friday.