Gold hits record $1,000 an ounce

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Gold, which has soared to record levels in the past year, hit a new milestone Thursday, rising to $1,000 an ounce for the first time in futures trading — a boon for investors, but a deterrent to consumers shopping for jewelry.

Michelle Findlay, a manager at a toll operator company in New York, said she has stopped buying pure gold pieces. Her latest buy was a silver bracelet plated in 18-karat gold.

"I noticed lately the price has been going up," she said, while browsing at Gold Panel jewelry store on 34th Street in New York. "I'll wait, definitely, for the prices to go down" before buying another gold item, she said.

The price of gold has jumped nearly 20 percent since the start of the year after rising nearly 32 percent in 2007. The huge advance is mainly the result of a weaker dollar and record-high crude oil prices. The dollar fell below 100 yen Thursday for the first time in 12 years and hit another new low against the euro, while oil traded above $110 a barrel Thursday.

Lower interest rates — and the prospect of more cuts — bringing the dollar's value down makes dollar-based commodities like gold cheaper for foreign buyers. The weak currency has also made gold more attractive because the metal is a hedge against inflation.

"Interest rates are low and that doesn't help our dollar," said Scott Meyers, senior trading analyst with Pioneer Futures, a division of MF Global.

After topping $1,001 on the New York Mercantile Exchange, gold for April delivery fell back to settle at $993.80 an ounce on Thursday. Analysts say gold could still go higher, especially if the Federal Reserve cuts interest rates again next week as expected.

When gold becomes more expensive on futures markets, it doesn't immediately translate into higher prices for jewelry. But in the long term, the price tags on gold rings, bracelets and necklaces do go up. Exactly when the increases from this latest jump will show up on price tags depends at least in part on a retailer's size.

Big retailers like Tiffany & Co. and those that sell jewelry to large department stores order products up to a year in advance and keep more in stock. Those stores likely didn't pay as much for the jewelry when they ordered it, so they wouldn't need to raise prices as quickly to offset costs.

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