Gold hits record above $1,225

Toykyo - Gold hit a record high over $1,225 an ounce on Thursday, exerting an irresistible pull on investors seeking an alternative to the dollar, despite a Chinese central bank official warning against a potential asset price bubble.


Gold has risen by more than 7 per cent since touching a low of $1,136.80 last Friday on now-waning fears that the Middle Eastern emirate Dubai might default on its debt, which spurred investors to sell the metal to raise cash to cover losses.


Spot gold rose as high as $1,226.10 per ounce before slipping to $1,1218.90 by 0826 GMT, still up $3 from New York's notional close.


U.S. gold futures for February delivery touched an all-time high of $1,227.50.


Expectations for some central banks, especially China's, to diversify reserves into gold are also a key driving factor, particularly after India last month bought about half the 403.3 tonnes of gold the International Monetary Fund planned to sell.


But gold prices are high and markets should be careful of a potential asset bubble forming, Hu Xiaolian, a vice-governor of the People's Bank of China, said on Wednesday.


"We must watch out for bubbles forming on certain assets, and be careful in those areas," Mr. Hu said in Taipei.

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METALS-Investment money propels copper to new 2009 high


* Fresh investment money drives metals higher

* Copper stocks at highest since late April

* Aluminum options expiry on Wednesday


NEW YORK/LONDON, Dec 2 (Reuters) - Copper and aluminum rose to
their highest levels in over a year on Wednesday, as investment
buying momentum picked up pace amid receding fears about Dubai's
debt problems and upbeat data that bolstered the recovery picture.

Copper for March delivery on the New York Mercantile
Exchange's COMEX division ended up 2.75 cents at $3.2585 a lb, after
dealing between $3.2075 and $3.2730, a new high dating back to late
August 2008.

On the London Metal Exchange (LME), copper for three-months
delivery rose to $7,170 a tonne, its highest since September
2008, before ending the session up $50 at $7,125.

Aluminum peaked at $2,165.25 a tonne, its loftiest since
late October 2008, and closed up $54 to $2,157.

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Aluminum , used in transport and packaging, was at $2,157
from $2,103. Aluminum inventories fell 3,800 tonnes, but were still
near record highs in the region of 4.6 million tonnes.

Option expiry takes place on Wednesday. There are more than
18,000 outstanding contracts to buy -- far outweighing those to sell
-- around 450,000 tonnes of aluminum at prices between $2,000 and
$2,150 a tonne.

Zinc rallied to $2,437 a tonne, its highest since
end-March last year, before closing at $2,420 from $2,372.

Lead ended the day at $2,480 from $2,468 and
an earlier 18-month high of $2,525.50 a tonne.

Tin was last bid at $15,225 from $15,200.

Nickel was at $16,450 from $16,295.

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Gold & PGM Prices

Dec 3 2009 7:43AM NY Time dd Change Gold 1218.00 +0.26% Platinum 1494.00 -0.20% Palladium 386.00 -0.52% Rhodium 2530.00 -2.69%

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	24 Hour Base Metals