NEW YORK (CNN/Money) -
The price of gold closed above $350 an ounce for the first time in nearly six years Friday as investors, faced with a weakening dollar and possible war in Iraq, continued pouring money into the traditional safe-haven investment.
Gold for February delivery rose $5.10 to $351.60 an ounce on the New York Mercantile Exchange Friday. The precious metal last closed above that level on April 1, 1997, when it finished at $351.60, according to NYMEX.
"All the stars are realigning," Amaury Conti, equity trader for U.S Global, said of the conditions that have sparked the gold rally.
The gain has been partially fueled by the weakening dollar, which, by making imports more expensive, could drive the kind of inflationary conditions that gold performs well under. A soft dollar also makes gold priced in dollars cheaper for overseas investors.
The euro, which turns 4 years old Saturday, rose to $1.0423 Friday from $1.0368 in the previous session. The dollar slipped to ¥119.69 from ¥120.07 Thursday.
International tension has also helped. While moving troops to the Persian Gulf for a possible war with Iraq, the U.S. has also been involved in a nuclear standoff with North Korea.
The rise of gold also comes as gold producers back off on selling gold in the futures market to lock in prices. This decline in hedging has put a floor under prices, which declined for much of the '90s.
And a third year of stock market declines in 2002 has sent investors looking for alternative investment like gold, real estate and bonds.
Gold stocks have been big beneficiaries. Shares of Newmont Mining (NEM: Research, Estimates), for example, rose 61 percent last year.
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