(recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, March 6 (Reuters) - Gold roared to a record high on
Thursday and held within sight of $1,000 an ounce, as the dollar
struck an all-time low and oil stood around $105 a barrel.
Silver struck a 27-year high above $21 on strong speculative
buying, platinum traded below an historical peak and U.S. gold
futures held just near record highs around $995 an ounce.
Spot gold <XAU=> jumped as high as $991.90 an ounce and was
quoted at $987.60/988.40 at 1123 GMT, against $985.70/986.50 in
New York late on Wednesday.
"It's an investor-driven story, with the investor demand
coming from U.S. dollar weakness. I can't see the trend abating
anytime soon, with all the drivers of gold remaining in place,"
said Daniel Hynes, metals strategist at Merrill Lynch.
"Also inflation concerns seem to be rising on a daily basis
and that certainly bodes well for gold, which in the past has
been a hedge against such concerns.
"$1,000 is a foregone conclusion now."
Gold has gained nearly 20 percent in 2008 as funds,
speculators and investors pour money into precious metals on
expectation of further interest rate cuts in the United States
and record-high oil, which lift its safe-haven appeal.
The dollar hit lifetime lows versus the euro, with investors
looking to the European Central Bank's interest rate decision
and news conference later for fresh signals on monetary policy.
While the ECB is seen holding interest rates steady at 4
percent, all eyes are on the bank's president, Jean-Claude
Trichet, for hints of a shift in policy that might provide
respite for the greenback's broad fall.
"The ongoing weakness in the dollar and fresh highs for oil
look set to entice further anti-recessionary/inflationary
hedging towards gold and will ultimately push the metals
higher," TheBullionDesk.com said in a note.
"The big question now is how much resistance lies ahead of
$1,000," it added.
DOLLAR WEAKNESS
The dollar's decline has been exacerbated by weak U.S.
economic data and worries about a recession, which has
galvanised the U.S. Federal Reserve to cut borrowing costs
sharply to 3 percent, with further easing expected to come.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil held around $105 a barrel, retaining most of the
previous day's gains to record highs due a drop in U.S. oil
inventories and OPEC's decision to leave output unchanged.
Gold futures for April delivery <GCJ8> on the COMEX division
of the New York Mercantile Exchange rose $1.3 to $989.70 an
ounce, near its record high of $995.20 hit on Wednesday.
Gold has also jumped in other currencies, which is often
seen as a bullish sign. The metal quoted in euros <XAUEUR=R> was
at 644 euros an ounce, just below this week's record high of
649.85 euros. It <XAUGBP=R> was last at 497.32 sterling, versus
Monday's record of 497.55 sterling.
Platinum <XPT=> fell to $2,225/2,235 an ounce after rising
to $2,272, against $2,240/2,247 in New York on Wednesday. It hit
a record high of $2,290 this week on supply concerns following
power problems in South Africa, the world's top producer.
South Africa will allow mines to increase power consumption
from 90 to 95 percent of normal usage as the country's power
crisis has stabilised, Bloomberg News reported on Thursday,
citing the energy minister. []
Mines in South Africa, the world's biggest producer of
platinum, have been operating at 90 percent of their usual power
since late January after electricity shortages forced the mining
sector to shut down for five days.
Silver <XAG=> hit an intraday high of $21.20 an ounce, up
from $20.61/20.66 late in New York. Spot palladium <XPD=> fell
to $546/555 an ounce from $552/556 .
(Reporting by Atul Prakash; editing by Michael Roddy)
