LONDON -- Gold extended gains on Monday to
hit a near one-month peak above $900 an ounce on the back of
speculative buying as oil hovered around its record high,
fanning fears of inflation.
Platinum tracked gold's gains and jumped to its highest
level in more than two months ahead of a supply and demand
report by precious metals refiner Johnson Matthey before
retreating as speculators booked profits.
Johnson Matthey said platinum may spike to a record high of
$2,500 an ounce this year and the market is expected to close
2008 in a significant deficit due to production shortfalls and
strong metal demand.
Spot gold hit a high of $913.35 an ounce, its highest level
since April 23, up from $899.55/900.95 late in New York on
Friday but remained below a lifetime high of $1,130.80 hit on
March 17.
Previous attempts to revisit the record high have been met
by heavy profit taking, which saw gold fall to a four-month low
of $845 an ounce in early May.
"Whether gold will hold above $900 is a difficult question.
Around about $920 should be the psychological resistance for the
metal," said Walter De Wet, an analyst at Standard Bank.
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"If the dollar can appreciate again to around $1.54 (against
the euro), we should see gold becoming down again. Platinum of
course remains very well supported from the physical side."
Crude oil was up $1.06 at $127.35 a barrel. It closed at
$126.29 a barrel on Friday after touching a record peak of
$127.82 earlier that day following a bullish price forecast from
investment bank Goldman Sachs.
In theory, firmer crude oil lifts gold's appeal as a hedge
against inflation.
Gold futures for June delivery on the COMEX division of the
New York Mercantile Exchange added $6.2 an ounce to $906.1 an
ounce in electronic trading.
Spot platinum rose to $2,135/2,155 an ounce from
$2,126/2,141 an ounce late in New York, having earlier hit an
intraday high of $2,174 an ounce — its best level since March
7.
Platinum struck a 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.
"Jewellery demand is obviously down but industrial demand is
very very strong. The supply situation is going to be sort of
one of the factors to watch in the next few years," said James
Moore, an analyst at TheBullionDesk.com.
In the physical sector, dealers in Asia noted some selling
from speculators who cashed in on platinum's gains but demand
from the industrial sector remained solid.
"The automobile and glass industries are aggressive buyers
for physical platinum, but retail investors cashed in," said a
dealer in Tokyo.
"Our sales today are mostly for the industrial sector," he
said.
The market shrugged off news that a wave of xenophobic
attacks spread through South African townships and mobs beat
foreigners and set some ablaze in scenes reminiscent of
apartheid-era violence.
In other precious metals, spot silver edged up to
$16.96/17.02 an ounce from $16.90/17.00 late in New York.
Spot palladium fell to $440.50/448.50 an ounce from
$443/451 on Friday.
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