Reply #50: Gold tops $578; analysts predict more gains

[UpInArms]

http://www.marketwatch.com/news/story.asp?siteid=mktw&guid=%7BC899F994-D28D-4A04-A965-B45C7579920F%7D&symbol=

SAN FRANCISCO (MarketWatch) -- Physical and investment demand drove gold futures over $578 an ounce Thursday to new 25-year highs as analysts continued to tout the likelihood for even higher prices.

The per-ounce levels of "$600 gold and $10 silver have been targets I felt were only a question of when not if, said Peter Grandich, editor of the Grandich Letter.

Even so, he says "a serious correction can occur once the excitement of reaching these levels is exhausted."

Gold for April delivery climbed as high as $578.40 an ounce on the New York Mercantile Exchange -- trading at levels not seen since January 1981. It was last at $576.20, up $2.20.

"The drop in supply from central banks, added to the new investment demand from the E.T.F.'s (exchange-traded funds), and Japanese and investment bank buying, keeps gold driving forward, barely pausing for breath," said Julian Phillips, an analyst at online resource GoldForecaster.com.

"It's not so much an individual crisis that takes gold up, but the number of potential crises that make one possible and trigger others, that makes gold an attractive investment," he explained.

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Elsewhere in the metals market, March silver tacked on 6 cents to trade at $9.855 an ounce after climbing as high as $9.915 an ounce. The day's high matches Tuesday's high, which was the loftiest level since 1984.

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