Gold hits one-week high

Gold jumped to a one-week high on Thursday as speculative buying picked up on a falling US dollar and surging crude oil, heightening the metal's appeal as a hedge against inflation. Gold hit a high of $954.50 an ounce before slipping to $945.60/946.40 an ounce, down from $949.00/949.80 an ounce late in New York on Wednesday.
It was still below a lifetime high of $1,030.80 touched on March 17. Platinum and silver hit their loftiest level in more than a week to track gains in gold, while palladium matched a near one-week high struck on Wednesday.
"Looking ahead, we should be able to try $965. We are now back above positive territory, technicals-wise," said William Kwan, a dealer at Phillip Futures in Singapore. "Platinum is already above $2,000, so right now buying interest is flowing back because of a better technical picture and definitely the weak dollar."
Gold has gained more than 20 percent in 2008 on speculative buying driven by record high oil prices that raised fears of inflation, and expectations of further interest rate cuts in the United States, which reduced the dollar's appeal.
Some dealers said investors' confidence was gradually restored after last week's broad-based sell-off in commodities knocked down gold prices to a one-month low of around $904 an ounce. "There's a lot of interest from private investors to purchase gold around $920, and they have bought it. This is what has given the gold price a support," said Kwan of Phillip Futures. "There's less uncertainty."
The euro eased to $1.5810, having surged 2.7 percent combined on Tuesday and Wednesday, marking its biggest two-day rise against the dollar since January 2001, when the Federal Reserve started cutting rates to contain the last US recession. The dollar fell on Wednesday after data showed new orders for long-lasting US goods declined 1.7 percent last month and a key measure of companies' appetite for investment also contracted.
Crude oil rose for a third straight session on Thursday to $106 a barrel on a weak dollar and US government data showing larger-than-expected drops in fuel stocks.
"Some people are bidding up the price to around $954 but there's no follow-up. It looks like the market is rather quiet and the Japanese are still on the selling side," said a bullion dealer in Hong Kong. "I think $960 and $965 will be good resistance levels," he said.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $1.0 an ounce to $950.2 an ounce but off last week's record of $1,033.90.
Spot platinum hit a high of $2,010 an ounce, up from $1,990/2,000 an ounce. Spot palladium fell to $449/454 an ounce from $453/458 an ounce, having hit an intraday high of $454 on Thursday. The most active February Tokyo platinum futures ended 113 yen per higher at 6,285 yen per gram, reflecting a firm cash market. Silver rose as high as $18.46 an ounce, up from $18.35/18.40 an ounce.