Gold futures hit a record $900.10 on the New York Mercantile Exchange on Friday.

PARIS, Jan. 12--Gold’s record advance could continue as nervous investors buy into a traditional store of value against the turbulent backdrop of a falling dollar, higher inflation and a global credit crunch, analysts say.
On Friday, the price of Gold broke through $900 an ounce for the first time during trading in New York. Futures touched an all-time record of $900.10 an ounce after strong price gains in London trading earlier, AFP wrote.
Gold’s last great charge was in the 1970s--a decade marked by recession, the two stunning oil shocks of 1973-79 and 1979, rampant inflation and doubts about the outlook for the US economy, then as now the world’s largest.
As a result, investors flocked into the precious metal, pushing it up to a then record $850 per ounce in January 1980 before it steadily fell out of favor as the United States and the Western economies slowly recovered.
Its fortunes turned again in recent years on rising demand for all commodities, driven by the booming Chinese and Indian economies.
But the real kick came in late 2007 as the prospect of slower growth and rising inflation raised the specter of “stagflation“--the bugbear of the 1970s--coupled with a fearsome credit crunch sparked by the collapse of the US subprime home loan market.
Dan Smith, metals analyst at Standard Chartered, said “investment in gold is being driven by a number of factors including its safe-haven status, concerns about the outlook for the US dollar and inflation fears.“
After a likely consolidation of the 25 percent gains made over the past year, Smith said he expects a further rise to $950, with $1,000 possible at some point during 2008.
“Given US growth concerns, precious metals are likely to be favored by commodity investors,“ he said.
“We are forecasting that the Gold price consolidates through the first half of 2008 before driving to new record highs to average $950 by the fourth quarter of 2008.
“Given this level, the price could well hit $1,000 at some point during the year.“

WASHINGTON, Jan. 12--Democratic presidential front-runners Hillary Rodham Clinton and Barack Obama both promised to help ease the impact of a mortgage crisis that has fueled recession fears, as a new survey showed the economy will be uppermost on voters’ minds, trumping the Iraq war and health care.
The poll released Friday also put Clinton and Republican Arizona Senator John McCain ahead of their party rivals nationally following their triumphs Tuesday in New Hampshire’s primary, AP wrote.
More than a third of the people polled said the economy will be their main concern when they decide how to vote for president in November, ahead of the Iraq war and health care.
Clinton, a New York senator and former first lady who wants to be the country’s first female president, called for Congress to pass an economic stimulus package that could cost as much as $110 billion (74 billion euros) to help low-income families keep their homes, to subsidize heating costs this winter and perhaps refund some taxes.
In Las Vegas, Obama told a cheering union hall that he would provide relief for homeowners struggling to make mortgage payments and deliver tax cuts to the middle-class.
Meanwhile, the US trade deficit widened a sharp 9.3 percent in November to a larger-than-expected $63.1 billion, mainly due to surging crude oil costs, the government was quoted by AFP as saying on Friday.
The US trade deficit with major trading partners swelled to its highest level since September 2006, according to the Commerce Department. The US trade gap ballooned as imports rose at a faster clip than exports. Imports increased 3.0 percent to $205.4 billion while exports increased a much milder 0.4 percent to $142.3 billion.
Also, stocks fell sharply on Friday, capping a third consecutive weekly decline, on a warning by American Express Co. of mounting credit-card defaults and a slowdown in consumer spending, Reuters reported.
Worries about consumer belt-tightening hit stocks from across the board--from fast-food chain McDonald’s Corp to Tiffany & Co. The luxury jeweler cut its profit forecast on weak consumer spending.
The Dow Jones industrial average ended down 246.79 points, or 1.92 percent, at 12,606.30. The Standard & Poor’s 500 Index fell 19.31 points, or 1.36 percent, to 1,401.02. The Nasdaq Composite Index dropped 48.58 points, or 1.95 percent, at 2,439.94.

A demonstrator holds a banner which reads "APE (EPA) = Danger" and shows a portrait of Senegalese President Abdoulaye Wade near the European Union headquarters in Brussels, Belgium, on Friday.

BRUSSELS, Belgium, Jan. 12--European Union officials said Friday they would continue to pursue aid-and-trade deals with Europe’s former colonies in Africa and the Pacific despite criticism from aid group Oxfam that the pacts do little to fight poverty.
Only 35 of the 78 nations that make up the ACP group, which include some of the poorest in the world, have signed or initialed so-called Economic Partnership Agreements with the EU, officials were quoted by AP as saying.
Efforts to meet a Dec. 31 deadline set by the World Trade Organization for reaching regional trade pacts with all countries in the ACP failed. The WTO had ordered the 27-nation EU to end 30-year preferential trade ties with the former colonies after it deemed they were unfair to nations excluded from the arrangement.
Despite missing the deadline, the EU will continue talks to bring in other nations, officials said on condition of anonymity due to the sensitivity of the negotiations.
Many of those that did sign up to a phased-in free-trade pact, including the opening up of services and investment markets, were richer countries, including the entire 15 group of Caribbean nations.
The European officials were particularly critical of Senegal, Nigeria, South Africa, Gabon and the Republic of Congo, all of which remain hesitant to sign up to the pacts and which have urged others not to sign up.
Senegalese President Abdoulaye Wade said last month that most African leaders dismissed the EU’s free-trade proposals out of fear they would leave their countries vulnerable to cheap European imports that would damage economic development at home.
EU spokesman Peter Power told reporters that EU trade and development experts met a Senegalese delegation that was in Brussels to participate in a demonstration outside EU headquarters against the trade deals. Some 400 activists stood outside the EU buildings demanding a stop to the partnership pacts.
“We continue to urge them to sign in order to complete the process of our negotiations throughout Africa but it is their choice,“ Power said.

TOKYO, Jan. 12--Russia and Japan have begun establishing the first joint multipurpose investment fund of $3 billion, chairman of the board of the Russian-Japanese Business Council Aslan Atabiyev told a press conference on Friday. According to Atabiyev, the aim of the fund is to “attract funds of Japanese investors to finance projects in Russia and Japan“, Itar-Tass wrote.
“The planned amount of the investment fund for the first year of its activity is $3 billion, Atabiyev said. “The initial potential of investment projects of the fund amounts to more than $10 billion and embraces all main spheres necessary for running a fully-fledged and extremely profitable business.“ Among them, the Russian representative singled out “the participation in the construction of facilities in Sochi, the capital of 2014 Winter Olympic Games, leasing of building and special equipment, concrete-mixing units, automobile and tractor equipment.“
“The participation in reforming the oil and gas industry and hydropower engineering, including the construction of hydro-accumulating stations, also seems to be promising,“ he went on to say.
As Atabiyev stressed, concrete projects of Russian and Japanese companies will be presented at a bilateral investment forum due to be held in Tokyo on Feb. 14-15.
According to Atabiyev, the fund will be established with the assistance of the national business councils.
In another development, the European Commission said it was concerned over Russia’s planned acquisition of Serbia’s biggest oil and gas company.
Kristina Nagy, spokeswoman for the commission, said the sale of Serbia’s state-run NIS oil and gas company should have been transparent and had agreed-upon objective and commercial interests, Belgrade B92 radio reported Friday quoting the BBC.
The Serbian government of nationalist Prime Minister Vojislav Kostunica reportedly agreed to sell a majority stake of NIS to Russia’s state-run Gazprom company for $590 million. The deal could be signed in coming weeks.

LONDON, Jan. 12--The pound fell to an all-time low against the euro after weak manufacturing data underscored a gloomy outlook for the UK economy. Sterling dropped to its weakest since the single currency was introduced in 1999, at 75.86 pence to the euro, before later strengthening to 75.63 pence, BBC reported.
The pound also hit a 10-month low to the dollar at $1.9485 in earlier trade.
After a strong 2007, the pound is expected to weaken in 2008 as interest rates fall and the UK economy slows.
The pound hit a 26-year high against the dollar last year, above $2.
Analysts said investors were moving out of high yielding currencies in favor of the lower-yielding yen.
“Growth-oriented currencies are all under pressure, weaker sentiment has not helped the pound,“ Kamal Sharma, currency strategist at Bank of America, said.
Data from the Office for National Statistics showed an unexpected decline in the UK’s manufacturing sector in November, fuelling expectations of a cut in interest rates.
“The pound’s position looks increasingly precarious,“ Bank of New York Mellon said in a note to investors.
A weaker pound would make UK exports more competitive on world markets but it could also make imported goods more expensive and raise costs for Britons traveling abroad.