The benchmark gold contract on the Tokyo Commodity Exchange topped 2,100 yen per gram on Friday, setting a new 15-year peak on aggressive buying by funds and retail investors amid concerns about inflation and geopolitics.
The October contract rose as high as 2,103 yen per gram on Friday trade the priciest for TOCOM's benchmark gold since March 1990 when prices surged to 2,124 yen. "Gold has been drawing very strong interest from Japanese investors, and I don't think this boom will subside in the near term," a Tokyo broker said.
Retail investors in Japan are becoming increasingly bullish about the price outlook of gold due to the metal's positive fundamentals, its role as a hedge against inflation and robust investment demand for commodities, brokers said.
Buying of TOCOM gold was also accelerated by the view that the yen could weaken further against the dollar due to a widening gap in Japanese interest rates, and United States they said. Spot gold was quoted at $521.40/522.20 an ounce, up from $519.50/520.30 last quoted in New York.
Bullion jumped over $520 an ounce for the first time since April 1981, buoyed by another round of fund buying and Tokyo futures-related buying interest and pulling other precious metals up to multi-year peaks, traders said.
On Thursday February-delivery gold at the New York Mercantile Exchange's Comex division rose $4.90 to close at $522.70 an ounce, after moving from $515.80 to $523.90 the highest benchmark gold futures price since April 1981.
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