Gold futures in New York raced to their highest level in almost 23 years early on Thursday, powered by investment fund buying following the breakout above the key $500 an ounce level earlier this week, dealers said.
The market's recent robust rally also hoisted the other precious metals, pushing silver to an 18-year high and lifting platinum and palladium prices sharply.
At the COMEX division of the New York Mercantile Exchange, February delivery gold was up $6.30 at $505 an ounce by 10:51 am, trading from $494.30 to $505.70, which marked the highest price for an actively traded futures contract since February 1983.
At that time, gold reached a high of around $514 an ounce. "It's fund buying right here," a COMEX floor trader said. Gold has found favour with hedge funds diversifying into commodities to enhance returns, along with its classic role as a hedge amid economic uncertainty and geopolitical unease.
Also fuelling gains were investors' worries about inflation, as well as expectations that Russia, Argentina and South Africa are friendly to boosting the amount of gold in their reserves, analysts said.
The latest peak in February gold surpassed the 18-year peak scaled on Tuesday in then-benchmark December gold, at $502.30.
Next resistance was pegged above $505 and then at $506.70 - its life-of-contract high from Tuesday, before it became the most actively traded month.
Chart support was viewed at $500, $498.40 and $497, traders said.
Dealers said the market was awaiting the US November unemployment report on Friday for a potential reaction in trading.
Estimated volume was 14,000 lots by 10 am. Spot gold was quoted at $500.50/501.30, against $494.10/4.90 at Wednesday's New York close. Thursday's afternoon fix in London was at $499.75. March silver futures rose 15 cents to $8.535 an ounce, dealing from $8.29 to $8.555 - the highest price since October 1987.
Spot silver fetched $8.42/44 an ounce, from $8.27/29 previously. The fix was at $8.315.
NYMEX January platinum gained $14.10 to $994.50 an ounce. On Monday, futures shot up to $1,011 - their highest price since March 1980. Spot platinum firmed to $988/992. March palladium futures rose $12 to $272 an ounce - a fresh 19-month high. Spot palladium was worth $265/268.
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