Gold powers to record near $900 as funds active

(Reuters) - Gold surged to a record high just under $900 an ounce on Wednesday, powered by heavy buying by investment funds and helped by rising oil prices and a strong debut for Shanghai gold futures.

Platinum also set a lifetime high on positive fundamentals and tracking gold's rally. Silver touched two-month highs and was not far from its highest level in 27 years.

Spot gold jumped to $891.40 an ounce, surpassing the previous record of $881.10 reached on Tuesday. It was quoted at $883.60/884.40 at 1241 GMT, compared with $878.10/878.90 in New York late on Tuesday.

"This is an extension of the ongoing rally with very strong underlying interest in buying gold across geographic locations," said David Holmes, director of precious metals sales at Dresdner Kleinwort Investment bank.

 

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King Likely to Win New Term Leading Bank of England

(Bloomberg) -- Prime Minister Gordon Brown was speechless when asked yesterday whether he would reappoint Mervyn King as governor of the Bank of England, silently nodding toward Chancellor of the Exchequer Alistair Darling to repeat the promise of a decision in ``the next few weeks.''

When the time does come, Brown will probably say yes.

Brown has little choice but to overlook King's delay in acting on the financial crisis at Northern Rock Plc last year, say former colleagues, economists and lawmakers from the three main parties. They say the political costs of pushing King aside would outweigh any benefit.

 

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MBIA Cuts Dividend, to Raise $1 Billion After Losses

(Bloomberg) - MBIA Inc., the world's largest bond insurer, sliced its dividend and will raise $1 billion in the sale of notes to boost capital and preserve its AAA credit rating.

The reduction of its quarterly payout to 13 cents a share from 34 cents will save $80 million a year, Armonk, New York- based MBIA said in a statement today.

Fitch Ratings, which gave MBIA until the end of the month to raise money, said the plan may be enough to stave off a downgrade. The loss of MBIA's AAA stamp would jeopardize ratings on $652 billion of bonds and threaten the company's ability to guarantee securities, a business that makes up about 90 percent of revenue. MBIA said today it will report losses of $737 million in the fourth quarter after a slump in the credit quality of the debt it insures.

 

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