Gold reasserted its safe-haven status and rose about $2 in Asia on Monday after the dollar weakened against the euro in reaction to a warning of possible al Qaeda attacks on key buildings in the United States.
Spot gold was at $393.00/393.75 an ounce, compared with $391.00/391.50 last quoted in New York on Friday. It touched a one-week high of $394 an ounce in Asia. In Tokyo, the benchmark June 2005 gold contract rose five yen per gram to 1,406 yen per gram, tracking gains in New York's Comex market.
In other precious metals, platinum rose sharply to $828/833 an ounce from $817.50/822.50 an ounce last quoted in the US market, helped by gains in Tokyo platinum futures.
Some dealers said spot platinum firmed on a technical rebound after falling below the key $800 an ounce level last week and also due to renewed talk of a supply deficit in 2004.
"(It's) on the way to $850," said Yukuji Sonoda, a precious metals analyst at Daiichi Commodities in Tokyo, referring to a level last seen in April. "There's a deficit of 30 tonnes for this year. I personally think so.
Platinum supply shortage will increase platinum price within 10 years to $3,000," he said.
Some dealers said a planned output cut by Angloplat, the world's biggest platinum producer, and firm industrial demand were supporting the metal, which is used in jewellery and in auto catalysts.
Platinum hit a 24-year peak of $942 an ounce in April. Last December, Angloplat cut its output target for 2006 to 2.9 million ounces from 3.4 million after the randy strengthened, but since then the currency has continued to appreciate.
In the currency market, the euro was at $1.2059, compared with $1.2020 in late US trade, making dollar-priced gold more affordable for holders of other currencies.
The dollar fell after the United States declared a "high" level threat alert for buildings including the World Bank and International Monetary Fund in Washington on Sunday.
It added to bearish sentiment towards the US currency, which was already under some pressure because of Friday's weaker-than-expected US second-quarter gross domestic product.
Dealers said gold's future direction would be determined by the dollar's moves against other currencies, with good support pegged at around $388 an ounce. "Dollar movements will continue to dictate the market.
I don't see physical demand, which is always the case on Monday," said one dealer in Hong Kong, a key bullion-trading centre in East Asia. "The market had fallen to a low of $385 last week, so I would think we will hold above $390 this week and probably retest $400," he said.
Silver was $6.62/6.64 an ounce, up from $6.52/6.55 in New York. Palladium was trading at $215.50/220.50 an ounce, versus $214.50/220.50 in the US market.
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