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    Thursday, March 13, 2008

    USA TODAY - Gold crosses $1,000 an ounce as dollar dips to 12-year low

    This story has been sent from the mobile device of Bombastic4000@gmail.com. For real-time mobile news, go to m.usatoday.com.

    HONG KONG
    By Paul Wiseman, USA TODAY

    Gold futures prices sailed to a record $1,000 an ounce Thursday, fueled by a combination of a weakening dollar, strong investment demand and inflation fears due to rising crude oil prices.

    After touching the new high, gold prices slipped back a bit.

    Gold has been pushing up against the $1,000 mark for weeks, mainly due to the weaker dollar. Interest rate cuts and the prospect of more on the way have weakened the dollar so much that foreign investors can buy dollar-based commodities like gold more cheaply

    On thursday, the dollar plunged below 100 yen for the first time in more than 12 years, dragging Asian stocks down with it.

    In Tokyo, the benchmark Nikkei 225 stock index skidded 427.69 points, or 3.3%, to 12,433.44. Plunging head first were shares of exporters such as Toyota (down 3%), Honda (4.4%) and Canon (4.3%). The dollar dipped to 99.75 yen in Asian trading first time it's sunk below 100 yen since November 1995 before bobbing back to close above 100. A stronger yen makes Japanese-made products more expensive in the U.S. market and shrinks dollar earnings from the U.S. when they're brought home to Japan as yen.

    "It could do a lot of psychological damage in the short term and will hurt Japan's growth going forward," says Chi Lo, research director at Ping An of China Asset Management in Hong Kong. Lo says Asian markets are also jittery about the health of the U.S. economy and stock market. "The market is very volatile. It all depends on the U.S. economic situation. (Restoring calm) could take another six months, if not longer."

    In Hong Kong, the Hang Seng index tumbled 1,121.12 points, or 4.8%. Shares fell 2.6% in South Korea, 2.6% in Taiwan, 4.5% in Indonesia, 3.8% in Singapore and 2.5% in Malaysia. Airline stocks skidded on rising oil prices: Cathay Pacific shares nosedived 4.5% and China Southern Airlines shares dropped nearly 10%.

    "It's going to be a volatile and difficult year," Lo says.

    Oil futures hit a trading record above $110 a barrel overnight and were at $109.80 midafternoon in Singapore.

    Contributing: wire reports

    Website address: http://www.usatoday.com/money/markets/2008-03-13-dollar-yen_N.htm

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