Gold ended near a one-month peak in US trade on Wednesday, driven by strong oil prices and a weak dollar, and platinum hit record highs on lingering supply concerns. Trading volumes were thin, however, with UK precious metals markets closed for the post-Christmas Boxing Day holiday and many US traders and investors away or keeping light positions due to year-end holidays.
Most-active gold futures for February ended up $13 or 1.6 percent at $829.50 an ounce on the Comex metals division of the New York Mercantile Exchange, after racing to $830.00 a new peak since November 27. Comex platinum for January settled up $13.10 or 0.9 percent at $1,549.30 an ounce after hitting a record high of $1,551.50.
Dealers of precious metals in New York attributed the rally to the run-up in oil due to the escalating Turkish-Kurdish conflict and declining US crude inventories. The weakness in the dollar was also a supporting factor. Gold prices often rise in tandem with oil and a weak dollar, as both factors tend to make investors buy gold as an inflation hedge. Geopolitical tensions such as the Turkish-Kurdish fighting also prop up gold's value as a safe-haven buy.
"You've got both avenues here kicking to run at least gold higher," said Frank McGhee, head precious metals trading at Integrated Brokerage Services LLC in Chicago.
Spot gold was up at $823.00/824.30 an ounce in late afternoon trading in New York, versus on Monday's comparative quote of $812.60/813.40. Comex's estimated final gold futures volume for Wednesday stood at 60,300 contracts, with gold options at 11,196 lots.
Spot platinum reached a new all-time high of $1,539/1,540 an ounce, against on Friday's record of $1,526/1,530. Platinum prices have surged almost 40 percent this year, with physical stocks of the precious metal having fallen to around seven weeks of global consumption due to lower output from top producer South Africa.
In other precious metals, Comex palladium for March edged up $4.90 to $368.30 an ounce. Spot palladium fetched $360/364. Comex silver for March settled up 17.50 cents at $14.8350 an ounce, moving between $14.560 and $14.900. Spot silver rose to $14.67/14.72 an ounce.
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