Gold futures in New York jumped on Thursday to close at their strongest mark since mid-March, as a weaker dollar and record crude oil prices fuelled heavy investment buying of hard assets like bullion.
Gold for December delivery on the New York Mercantile Exchange surged $8.90 or 2 percent to end $450.90 an ounce, after trading from $442.10 and $452.70.
The close was the highest on a settlement basis since March 16. A blend of commodity fund and dealer buying shoved gold futures through $445 resistance in trading before more relentless buying shoved prices above a key psychological level at $450 after the European session had concluded.
"There were a lot of buy stops above $445, which had been the recent high," said Scott Meyers, senior analyst at Pioneer Futures. "Once it took that level out, it wasn't even about the euro being up."
A weaker dollar tends to boost gold prices because it makes dollar-denominated bullion cheaper for non-US buyers. The dollar stumbled to more than two-month low against the euro on Thursday after a softer-than-expected US July retail sales report.
The euro last fetched $1.2438. "I think this trend is up and gold looks strong we've taken out a lot of resistance. This thing's probably heading toward $455 to $457.50 shortly," Meyers said.
Geopolitical tensions amid violence in Iraq and Iran's resumption of atomic work at a uranium conversion plant this week also propped up gold, traders and analysts said.
Crude held near a record high at $66 a barrel on Thursday, bolstered by strong global demand and declining US gasoline inventories. Gold often benefits from rising oil prices as the prospect of inflation prompts some investors use gold as a hedge.
Traders and analysts said the gold market now awaited on Friday's US trade data for a sign of next direction in currencies and precious metals.
Final estimated Comex gold volume was huge 98,000 contracts, above on Wednesday's total of 32,087 lots. Participation among traders in the market continued its recent trend of increases.
Open interest on Comex rose 2,153 lots to 289,992 lots on August 10. Bullion on Thursday shot to its highest for the year at $447 a troy ounce after European trade was closed.
Spot gold last was at $445.30/446.10, way above on Wednesday's New York close at $437.10/437.90. In world No 1 gold producer South Africa, around 110,000 miners accepted an increased wage offer from gold producers and unions asked their members to resume work at the late on Thursday shift, ending the first industry-wide strike in the country's gold sector in 18 years.
Comex September silver rose 10.5 cents to end at $7.183 an ounce its highest close in a week after dealing from $7.085 to 7.22. Spot silver hit $7.15/18, up from $7.07/10 previously.
In the Nymex metals, October platinum gained $12.20 to close at a one-week high at $919.70 an ounce. Spot was at $912/916 an ounce. September palladium was up 80 cents at $188.50 an ounce. Spot last traded at $185/190.