Gold futures in New York rose sharply for the second day in a row early on Wednesday, racing toward record highs on the back of a pummelled dollar, soaring crude oil prices and chart-based buying.
In early electronic trade, silver futures breached $16 an ounce and platinum contracts traded a hair below $1,500. Both silver and platinum had retreated from their contract highs on profit taking.
"It seems like it's mostly spurred by the Chinese official saying that they are considering diversifying out of the US dollar. So the dollar plummeted off that and gold shot up," said one precious metals dealer in New York.
The dollar fell to historic lows of $1.47 per euro and $2.10 to the pound after comments from senior Chinese officials stirred concerns about its central bank shifting reserves away from the US currency.
At 9:38 am EST (1438 GMT), most-active December gold on the Comex division of the New York Mercantile Exchange was up $10.70 or 1.3 percent at $834.10 an ounce after hitting a contract high of $848. The early session low was $824.80.
Spot-month Comex gold futures hit a record high of $875 on January 21 in 1980. Spot bullion was quoted at $833.00/833.80, compared with the Tuesday New York close at $820.90/821.700. London bullion dealers fixed the morning spot reference price at $841.75.
In addition, a Chinese central bank official said the US dollar was losing its status as the major global currency. Comex December silver was up 6.5 cents at $15.445 an ounce, after trading as high as $16.275 in early electronic sessions, a contract high.
Spot silver was quoted at $15.34/15.39, compared with Tuesday's late New York quote of $15.37/15.42. London silver was fixed at $15.82. Nymex January platinum was down $7.60 at $1,476.10 an ounce, after racing to a contract high of $1,498.80. Spot platinum was quoted at $1,471/1,475. December palladium dropped $2.45 to $377.25 an ounce. Spot palladium fetched $376/380.