U.S. gold futures hit 28-year peak

NEW YORK (Reuters) - U.S. gold futures rose to a 28-year high in screen trade on Tuesday, after the Federal Reserve slashed the benchmark interest rate by a half-percentage point in a bid to boost the economy.

At 2:37 p.m. EDT, on the Globex electronic platform used by the New York Mercantile Exchange and its COMEX metals division, the December gold contract was up $8.50 or 1.2 percent at $732.30 an ounce. Just minutes earlier, it rallied to a high of $733.40.

That exceeded the previous high set on May 12, 2006, when the New York gold contract hit an $732 ounce, which marked the loftiest level since January 1980.

"Obviously this was a very substantial, aggressive move. I think it's bullish for gold. I think it has potential inflationary implications," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.