Gold Hits $700; Highest Level Since 1980

[rusty_parts2001]

Gold prices surged to a new quarter-century high of $700 an ounce Tuesday as funds bought into the market, driven by tension between the United States and Iran and expectations of a pause in interest rate hikes.

Iran's president wrote in a letter to President Bush that democracy had failed worldwide and lamented ''an ever-increasing global hatred'' of the U.S. government. Secretary of State Condoleezza Rice rejected the letter Tuesday, saying it didn't resolve questions about the country's nuclear program.

Analysts at TheBullionDesk.com said Washington's dismissal of Iran's letter gave way to the gold rally, noting that it appears that tension with Iran will likely rise again, and also that the dollar will stay under pressure. A weakening dollar typically encourages investors to instead turn to gold, considered a safer alternative to the U.S. currency.http://www.nytimes.com/aponline/business/AP-Gold-Prices.html