(Repeats to justify table)
* Spot gold hits 18-month high, US gold 14-month top
* Dollar falls to near one-year lows vs euro
* Gold, silver, platinum hit multi-month highs
(Rewrites with late New York prices, adds comment, price
table. Adds NEW YORK to dateline)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, Sept 16 (Reuters) - Gold hit an 18-month
high on Wednesday as the dollar slid near one-year lows against
the euro, sparking buying of the yellow metal as an alternative
asset and helping lift silver and platinum to multi-month
peaks.
Spot gold <XAU=> remained sharply higher at $1,017.65 an
ounce into late New York dealings, compared with $1,005.90 on
Tuesday. Wednesday's high of $1,020.50 an ounce was last
reached in March 2008.
In New York, December gold <GCZ9> finished $13.90 higher, a
1.38 percent gain, at $1,020.20 an ounce on the COMEX division
of the New York Mercantile Exchange. The contract reached a
high at $1,023.30 an ounce, unseen since July 2008.
Gold's rally to levels unseen in 14 months primarily
resulted from heavy U.S. dollar selling against the euro.
"Gold's rise is related to the weaker dollar, which is a
function of risk aversion coming out of the market. We had
strong dollar buying for months because of the credit crisis.
As financial markets give every impression of stabilizing, that
is unwinding. A byproduct is much higher gold prices," said
HSBC metals analyst and senior vice president, James Steel.
The precious metal could be building up for an assault on
its previous all-time high above $1,030 an ounce, set in March
2008 in the spot market, traders said. U.S. gold is eyeing the
$1,033.90 per ounce prior record high on gold's continuation
chart.
Given the extent of net speculative buy positions in
COMEX-traded gold futures, conditions for gold are not as
favorable as they were at the time of last year's record high,
said Barclays Capital analyst Suki Cooper.
Nonetheless, if the dollar keeps falling, gold could
continue to climb, she said.
"If we see currency movements becoming much more favourable
-- if we see the dollar weakening substantially -- that is
going to be a key support for prices," Cooper said.
The dollar slid to a near one-year low against the euro as
optimism about global economic recovery eroded demand for the
greenback as a safe haven. []
Gold was also boosted when several stronger-than-forecast
U.S. economic and inflation readings over the last two days
implied a potential for inflation to heat up down the road.
"If a large element of the buying is based on inflation
materializing and it fails to, you could see some liquidation.
But it may take many months before that would appear and there
is a bullish inflation camp that won't pay attention to that,"
said HSBC's Steel.
U.S. industrial output advanced for a second consecutive
month in August, while higher gasoline costs pushed up consumer
prices, although economists said the risk of inflation remained
low. [] []
On Tuesday, sales at U.S. retailers rose at their fastest
pace in 3-1/2 years in August and Federal Reserve Chairman Ben
Bernanke said the recession was "very likely" over.
At the annual Denver Gold Forum, the Gold Fields <GFIJ.J>
chief executive officer told Reuters he sees gold hitting
$1,600 an ounce if crude oil goes to $100 a barrel in the next
six to 18 months. []
For additional stories from Denver click here
[]
PHYSICAL DEMAND PICKS UP
Gold's rally helped lift other precious metals, with silver
<XAG=> and platinum <XPT=> -- both of which are used in
manufacturing -- also hitting multi-month highs as base metals
rose on the more positive economic growth outlook. []
Silver prices hit a 13-month high of $17.45 an ounce, and
held around $17.40 in late trade, against $16.97 on Tuesday.
Platinum hit a peak of $1,346, its firmest since September
last year, and was later at $1,341 against $1,323, while
palladium <XPD=> was at $296 an ounce against $291.50.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCZ9> 1020.20 13.90 1.4 884.30 15.4
US silver <SIZ9> 17.430 0.430 2.5 11.295 54.3
US platinum <PLV9> 1350.10 29.80 2.3 941.50 43.4
US palladium <PAZ9> 300.50 4.25 1.4 188.70 59.2
Prices at 4:41 p.m. EDT (2041 GMT)
Gold <XAU=> 1016.60 10.70 1.1 878.200 15.8
Silver <XAG=> 17.36 0.39 2.3 11.30 53.6
Platinum <XPT=> 1344.50 21.50 1.6 924.50 45.4
Palladium <XPD=> 296.00 4.50 1.5 184.50 60.4
Gold Fix <XAUFIX=> 1015.75 19.75 2.0 836.50 21.4
Silver Fix <XAGFIX=> 17.290 0.770 4.7 14.760 17.1
Platinum Fix <XPTFIX=> 1339.00 6.00 0.5 1529.00 -12.4
Palladium Fix <XPDFIX=> 298.00 1.00 0.3 365.00 -18.4
For graphic on key historic moves in gold, click on
http://graphics.thomsonreuters.com/099/GLD_TMLN0909.html
For a take-a-look on gold hitting an 18-month high click on
[]
(Additional reporting by Jane Grieve; Editing by Peter
Blackburn and Lisa Shumaker)
