LONDON -- Gold jumped to its highest level
in three weeks above $900 an ounce on Friday after oil struck
another record and the dollar dropped against the euro.
Platinum also rallied ahead of the release of a report on
the supply and demand outlook from refiner Johnson Matthey.
Spot gold hit a high of $904.30 an ounce, up from
$881.55/882.75 late in New York on Thursday, but was still well
below a lifetime high of $1,030.80 an ounce hit on March 17.
"Our one-month target has been $920," said Suki Cooper,
precious metals analyst at Barclays Capital.
"We see prices trading in consolidation mode with an upside
bias. It's questionable whether prices currently have the
momentum to make a sustained move higher."
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The most active June gold futures contract on the
COMEX division of the New York Mercantile Exchange added $22.9 to
$902.9 an ounce.
"It is up on the back of the euro/dollar and weak consumer
sentiment," analyst Michael Widmer at Lehman Brothers said.
"If we stay above $900 at the Friday close, that would give
some support for gold."
Oil shot to a record high near $128 on Friday after Goldman
Sachs, the most active investment bank in energy markets,
sharply raised its forecasts for prices.
The dollar extended losses against the euro and gave up
gains versus the yen after a report showed U.S. consumer
confidence tumbled to its lowest in 28 years in May.
"The bulls can tempt investors to take gold to $910 and $914
again but it may fall again," said a bullion dealer.
"Gains could be capped around $913 and $924."
JOHNSON MATTHEY REPORT
Spot platinum jumped to $2,132.50/2,152.50 an ounce from
$2,079/2,094 late in New York.
The metal gained more than 2 percent on speculation precious
metals refiner Johnson Matthey may release another bullish
outlook in its annual report on platinum group metals next week.
"I think the underlying fundamentals for platinum are very
strong," said Cooper of Barclays Capital.
"We're likely to see another large deficit in the market
this year, given the expectations for reduced supply on the back
of the power problems in South Africa."
Platinum, used in jewellery and auto catalysts, powered to
record high of $,2,290 an ounce on March 4 after a power crisis
in main producer South Africa disrupted mining and sparked fear
of a supply deficit.
Gold hedging positions of mining companies fell 18 percent
to 22 million ounces in the first quarter of 2008, a report
sponsored by Fortis Bank said on Friday, forecasting a full-year
drop of 10-12 million ounces.
Palladium rose to $449.00/454.00 an ounce from $432/440 in
late New York. Silver edged up to $16.97/17.02 an ounce from
$16.70/16.76 in New York.
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