Gold price hits record high as dollar wanes

Gold prices hit a record above 1,100 dollars on Monday with the dollar weakening after a pledge by G20 countries to keep economic recovery pumped up with easy money. In morning trading here, gold struck an all-time peak of 1,109.50 dollars an ounce as the euro rose to 1.50 dollars for the first time in two weeks.
Gold "established itself above the psychological (1,100-dollar) level this morning as ministers at the weekend G20 meeting pledged to maintain their fiscal stimulus measures," said James Moore, an analyst at TheBullionDesk.com.
The governments of the world's biggest and top emerging economies said in a statement over the weekend that "recovery is uneven and remains dependent on policy support."
And "to restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured," the G20 said in a communique issued after a finance ministers' meeting in Scotland.
The International Monetary Fund meanwhile said on Saturday that emergency stimulus measures must remain to avoid endangering a "nascent" economic recovery.
"An overarching risk is that the recovery stalls" owing to early exits from record-low interest rates and massive state cash injections, the IMF said in a report to coincide with the G20 meeting.
"Premature exit from accommodative monetary and fiscal policies could undermine the nascent rebound, as the policy-induced rebound could be mistaken for a strong and durable recovery," the IMF said.
Last week, the US Federal Reserve decided to hold rock-bottom US interest rates for "an extended period" and to keep trillion-dollar stimulus measures in place to support the United States' fragile recovery from recession.
"Unless there's a turn in US interest rates, gold will be well bid," Ronald Leung, director at Lee Cheong Gold Dealers in Hong Kong, said on Monday.
The precious metal had on Friday reached above 1,100 dollars an ounce for the first time, following news that Sri Lanka had joined India in purchasing gold in favour of the US currency.
"We have been observing that prices of gold have been going up so we have been strategically buying gold over the past several months as part of a reserve management process of diversifying our portfolio," Srik Lanka Central Bank assistant governor Nandalal Weerasinghe told AFP on Saturday.
However he declined to disclose from which sources the bank was buying the gold or at what prices.
The IMF last week said it had carried out a massive sale of the precious metal to India.
The Fund revealed it had sold 200 tonnes of gold to India's central bank over a two-week period last month for 6.7 billion dollars to bolster its finances.
In London on Monday, the euro was changing hands at 1.4978 dollars against 1.4846 dollars late on Friday, at 134.91 yen (133.45), 0.8904 pounds (0.8934) and 1.5108 Swiss francs (1.5100).
The dollar stood at 90.07 yen (89.90) and 1.0086 Swiss francs (1.0171).
The pound was at 1.6823 dollars (1.6611).
On the London Bullion Market, the price of gold grew to 1,108.55 dollars an ounce from 1,096.75 dollars an ounce late on Friday.