Comex gold finished up but below its 6-1/2-month peak on Wednesday, as safe-haven precious metals beckoned investors amid a sliding dollar and rising oil prices.
Silver likewise bolted to its highest since April, helped by the Europe's advance to eight-month highs against the greenback, according to trade sources.
Gold for December delivery on the New York Mercantile Exchange's Comex division settled up $3.20 at $424.80 an ounce after trading from $421 to $427.30 which was the loftiest level since April. "It is directly related to the weakness in the dollar today," Scott Meyers, analyst at Pioneer Futures, said. "The euro broke into new high territory and the metals complex went up with it.
"If the euro keeps going higher, you can look for $430 very quickly," Meyers said. The greenback dropped to an eight-month low against the euro at $1.2628 per euro on US growth worries and against a backdrop of rising oil prices and firmer gold.
Dollar weakness tends to lift demand for dollar-denominated gold by making the metal cheaper in non-US currencies.
Oil charged back up to $55 a barrel as a fresh fall in heating oil stocks stoked fears over winter supply. News that UBS Investment Bank revised upward its spot gold price forecast and lowered expectations for the dollar did not have a major effect on gold's rise, dealers said.
UBS said spot gold was now seen at $425 an ounce in one month and $430 in three months, versus a previous $405 and $425, respectively. Longer-term, UBS predicted it would average $460 an ounce in the fourth quarter of next year.
Gold has not traded over $460 since June 1988. Spot gold last changed hands at $423.20/3.90, near the 6-1/2-month peak of $425.15 hit, and above on Tuesday's New York close at $420.10/0.60.
On Wednesday's London afternoon fix was at $423.60. In Comex December gold, analysts pegged resistance at $426, $431 and $436.50, with support at $416.10 and $410.50.
December Silver surged 15.7 cents to $7.352 an ounce, moving from $7.15 to $7.385 which was its highest since April. Spot fetched $7.14/7.17 versus $7.16/19 previously.
On Wednesday's fix was at $7.24. Speculative buying in platinum touched off stop-loss orders and kicked prices to a one-week high before they pared gains. "There was light commission house and fund buying, but the trade was a seller," Rocky despotise at RJ futures said.
Nymex January platinum ended at $848.10 an ounce, up $9.20. Spot platinum reached $846.00/850.00. Thinly traded December palladium slipped $1 to $215.65 an ounce. Spot hit $214.00/218.00.
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