Gold rose around 1.6 percent to hit a quarter-century peak on Thursday before retreating, and platinum reached an all-time high of $1,275 on persistent speculative buying.
Fund selling linked to resurgent dollar dragged gold down to as low as $704.25 an ounce at one stage in Asian trading, but dealers said buying interest resurfaced around that level. Spot gold rose as high as $712.50 an ounce before easing to $708.60/709.60, still up from $701/702 late in New York on Wednesday.
"The major bull trend remains intact. We're looking at $900 to $1,000 sometime this year. The price seems to be more and more realistic," said Ronald Lunge, director of Lee Cheong Gold Dealers in Hong Kong.
Gold hit a record high of $850 in January 1980. Gold has risen more than 37 percent this year, and 63 percent since the start of 2005, as investors diversify into precious metals as a hedge against global tensions, including those over US-Iran relations, high-energy prices and uncertainty about the dollar.
"There's strong buying from the Japanese in TOCOM, but I think physical selling has emerged above $710.
We saw sales of gold bars from different regions," said a dealer in Hong Kong, adding immediate resistance was pegged around $715 an ounce. The yen's falls ignited fund dying on the Tokyo Commodity Exchange, where the most active gold contract, currently April 2007, hit a 20-year high of 2,587 yen.
Japanese short-term fund operators and retail investors bought TOCOM gold as they were encouraged by dollar-based spot gold's gain. "Gold is bullish fundamentally and technically. It will rise more. We don't know how far it will go," said Shoji Sugata, assistant manager at Mitsubishi Corp.
Futures and Securities Ltd A weaker yen against the dollar prompted solid buying around the day's low, with gold receiving additional support from comments by Iranian President Mahmoud Ahmadinejad.
In Jakarta on Thursday, he said Iran's nuclear programme was peaceful and had no military purpose, adding he was ready to engage in dialogue with anybody. The president said, however, it was "ridiculous" for countries with nuclear arsenals of their own to be pressing Iran to curb its effort to develop nuclear energy.
He said Iran had "capabilities" to defend its interests. The dollar rose against the euro and the yen after the US Treasury stopped short of naming China a currency manipulator in a much-anticipated report.
The dollar rose to 111.23 yen from 110.50 yen in late US trade on Wednesday, when it fell to an eight-month low of 110.10 yen.
The euro was quoted around $1.2724, down from around $1.2735 but in sight of a one-year high of $1.2838 marked on electronic trading platform EBS. The dollar tumbled on Wednesday after a Federal Reserve interest rate decision failed to alter a view that the central bank is near the end of its two-year tightening cycle.
In the statement accompanying its 25 basis point rate rise to 5 percent, the Fed said it may need to raise rates further to keep inflation down, but further tightening would increasingly depend on the economic outlook.
Platinum rose as high as $1,275 an ounce on speculation that Johnson Matthew, the world's top distributor of the metal, will produce a bullish report on the market next week. The metal was last quoted at $1,253/1,258 late in New York. Palladium rose to $392/397 an ounce from $387/392. Silver edged up to $14.44/14.52 from $14.20/14.30 in New York.
Comments
Comments are closed.