The New Nation - Internet Edition

AFP, New York

The price of gold passed 800 dollars an ounce in New York on Wednesday for the first time since 1980 after the US Federal Reserve lowered its key short-term interest rate, the New York Mercantile Exchange said.

Gold futures for December touched 800.80 dollars on the exchange (NYMEX) after the Fed made the cut amid a persistent housing slump and fears of inflation spurred by record high crude oil prices.

The Fed, in a widely expected decision, cut its short-term federal funds interest rate by a quarter of a percentage point to 4.50 percent.

Gold prices have jumped by about a third in value over the past year. The metal benefits from a weak US dollar as it makes commodities that are priced in dollars cheaper for buyers using stronger currencies.

Higher oil prices spark inflationary concerns, while gold is regarded as a haven in troubled times.

Its all-time record high price stands at exactly 850 dollars an ounce, reached on January 21, 1980.