Gold prices soar to 28-year high over weak dollar -
LONDON: Gold struck a 28-year high yesterday, with the metal's appeal polished by a weak dollar, record high oil prices and geo-political tensions.
Continued supply worries also swept platinum to lifetime peaks.
Other precious metals were swept along by buoyant sentiment in gold and plantinum, with silver hitting its highest since the end of April.
Momentum has gathered on bullion as the US currency's recent falls to successive record lows versus the euro made the dollar-priced metal cheaper for holders of other currencies and raised its profile as a portfolio diversification tool.
"In the case of gold it's overwhelmingly related to the dollar, which is right back on the defensive again. It's very hard for gold not to rally in a case where the dollar is broadly moving backwards," HSBC analyst James Steel said.
He added, however, that volumes were light and that may have sharpened volatility on the market.
Spot gold hit a 28-year high of $759.90 and was trading at $756.50/756.90 per troy ounce, up from $748.40/749.10.
Firm crude prices highlighted gold's role as a hedge against oil-led inflation. Both oil and gold were also supported by rising tension between Turkey and Iraq.
Spot platinum hit a record $1,428 per ounce yesterday, having also been set or "fixed" in London at $1,426.
, with Turkey's parliament expected to debate a request for
It was last at $1,421.00/1,425.00, up sharply from $1,415.00/1,419.00 in late New York on Friday.
Speculative buying linked to worries over supply in key producer South Africa have pushed up prices and leasing, or lending, rates on the metal, with speculation that the market is set to turn in a deficit this year.
"Platinum continues to hold the most bullish forecast of the precious complex as already tight fundamentals could be made tighter still should South African mine workers strike," said analyst James Moore of TheBullionDesk.com.
South Africa's biggest mining union said on Friday it was preparing a strike notice which it hoped to submit to authorities this week to apply for a one-day protest against deaths and accidents at mines.
A national strike over safety, pending government approval, would be a first for the union.
"There is just not a glut of metal out there and that is supporting prices along with a weaker dollar. Prices above $1,400 I think are sustainable," Calyon analyst Michael Widmer said.
In other bullion markets, the most active December COMEX gold futures contract jumped $7.9 to $761.7 an ounce, closing in on the contract high of $800 Benchmark August TOCOM gold futures ended at 2,882 yen a gram, up 42 yen or 1.5 percent from the previous close.
The contract earlier rose as high as 2,883 yen, the highest for any benchmark since Oct. 1984.
Palladium rose slightly to $378.00/382.00 an ounce, compared to $377.00/381.00 in New York on Friday, while silver hit its highest since the end of April at $14.00. It was last at $13.89/13.94 an ounce up from $13.76/13.81.
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