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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Li Ka-Shing Rushes Into China Where Bond Angels Fear

(Bloomberg) -- The bond market is telling Li Ka-shing, Asia's richest man, he's sitting on a Chinese property bubble that's bigger than the one deflating in the U.S.

Bonds of China's Agile Property Holdings Ltd. yield 7.17 percentage points more than U.S. Treasuries, double the premium in July and 1.79 percentage points more than the debt of Los Angeles-based KB Home, which has the same credit ratings. Agile, a housing developer in the southern province of Guangdong, and Country Garden Holdings Co., China's most-profitable builder, canceled debt sales in November when borrowing costs climbed.

As China's government attempts to cool property prices with limits on lending, developers are in a land grab. Li, who made his fortune in Hong Kong real estate, Chinese billionaire Xu Rongmao, who owns Shimao Property Holdings Ltd., and hundreds of local developers boosted investment 29 percent in the first eight months of 2007, the National Bureau of Statistics said.

 

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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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