Gold hits 28-year high, platinum sets 10-month peak
By: Reuters
Published: 28 Sep 07 - 11:47
Gold hit a 28-year high on Friday, boosted by an ailing dollar and firmer oil prices, while platinum reached a 10-month peak and looked to test an all-time record.

Spot gold rose as high as $739,65 an ounce, its highest level since January 1980 when the metal rose to $850, and was quoted at $737,90/738,70 by 09:33 GMT. It closed at $733,80/734,60 in New York late on Thursday.

"The euro/dollar is still higher and eyes are also on oil prices. We have a good chance to see gold even higher as speculators and investors are still interested to buy some gold here," said Michael Kempinski, senior trader at Commerzbank.

"Gold's outlook is very positive and technically also it looks good, but the market is very volatile. I would buy the dip here. The short-term target is $750," he said.

The dollar stayed near record lows against the euro and a basket of currencies as investors awaited reports on US business activity and inflation for confirmation that more rate cuts are likely.

Friday data feature US personal consumption expenditure (PCE) numbers -- the Fed's favourite inflation measure -- at 12:30 GMT, followed by Chicago PMI -- which charts Midwest area business activity -- at 13:45 GMT.

A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
ECONOMC DATA

Oil extended gains for a third day to above $83 a barrel, nearing its record high as a weak dollar and pre-winter supply worries fuelled fund buying.

"Economic data released today on both sides of the Atlantic is expected to fuel speculation further that the Fed will cut rates again, while the European Central Bank keeps rates on hold," Dresdner Kleinwort said in a daily research report.

"Thus, the U.S. dollar could remain under pressure and this would be supportive for gold," it said, adding strong oil prices were expected to further lift gold prices.

In central bank news, the Swiss National Bank said it sold 113 tonnes of gold in the last three months as part of its sales programme of selling 250 tonnes by the end of September 2009.

Sweden's central bank said it would sell up to 10 tonnes of gold during the next 12 months and use the proceeds to buy foreign currency denominated securities.

In other bullion markets, benchmark August 2008 gold futures on the Tokyo Commodity Exchange rose as high as 2 763 yen per gram -- the highest for any benchmark since April 1985.

The most-active December gold contract on the COMEX division of the New York Mercantile Exchange was up $4,70 an ounce at $744.50 in electronic trade, after rising as high as $746,90. The contract hit a 28-year high of $74,10 on Friday.

Platinum continued to advance on investor buying and positive fundamentals, hitting a 10-month high of $1,363/1,367 an ounce, against New York's $1,356/1,360.

"People have bought platinum as it was underperforming compared with gold, but now it looks platinum is overperforming," said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities Ltd in Tokyo.

Platinum lease rates remained firm at around 2,4 percent from 1.98 a week earlier, traders said.

Silver rose to $13,63/13,68 from $13,50/13,55 an ounce in New York, while palladium rose to $344/348 an ounce from $341/345.

http://www.miningweekly.co.za/article.php?a_id=117857

Prices are even higher today. Near 745: An Ounce
http://www.kitco.com/market/