(Updates with quotes, closing prices, market activity, adds to
byline and NEW YORK to dateline)
By Frank Tang and Daniel Magnowski
NEW YORK/LONDON, March 3 (Reuters) - Gold edged closer to $1,000
on Monday, setting a record high for the fourth straight day as the
dollar tumbled and as crude oil held near an all-time high.
Silver jumped above $20 an ounce for the first time since
November 1980, while platinum and palladium held near highs.
Spot gold <XAU=> jumped as high as $989.30 an ounce and was at
$981.20/982.00 at New York's last quote at 2:15 p.m. EST (1915 GMT),
up from $973.30/973.75 in New York late on Friday.
Gold has gained around 18 percent in 2008 as investors shift
some of their money into the precious metal on expectations of more
interest rate cuts in the United States, volatile stock markets and
fears of rising energy costs.
"People are bullish because the macro-economic backdrop,
especially in the United States, is still deteriorating. There are a
lot of incentives in the market for people to actually go long on
gold at the moment," said Michael Widmer, metals analyst at Lehman
Brothers.
"As long as the dollar remains under pressure, I would expect
that gold prices would continue to rise."
The dollar fell to a record low against a basket of currencies
on Monday, as concerns about the health of the U.S. economy
intensified.
David Rinehimer, director at Citi Futures Perspective in New
York, said that widespread investor demand and the weakened dollar
-- which had a strong inverse relationship to bullion, had boosted
commodities and gold.
"The price action of gold has limited any real aggressive
selling and prompted hedgers to cover short positions," Rinehimer
said.
Record high crude oil prices increased gold's appeal as a hedge
against inflation. U.S. crude futures <CLc1> had reached an all-time
peak of $103.95 a barrel. However, crude oil settled at $102.45 a
barrel, sharply off its session peak.
Thomas Winmill, portfolio manger who oversees $290 million of
assets of Midas Fund <MIDSX.O> in New York, said that a negative
real interest rate environment was prompting investors to keep
allocating funds to hard assets such as gold.
In other bullion markets, U.S. gold futures also rallied to a
record high of $992 an ounce. The active gold contract for April
delivery <GCJ8> settled up $9.20 at $984.20 an ounce.
"It clearly needs further weakness in the dollar to do that
(reach $1,000), but it doesn't look inconceivable," said Stephen
Briggs, economist at SG Corporate and Investment Banking.
"Gold is heavily overdue a correction. It has for a while, but
it just doesn't do it," Briggs said.
In other metals, silver <XAG=> rose as high as $20.60 an ounce,
up from $19.80/19.85 an ounce late in New York on Friday, and was
last quoted at $20.29/20.34.
Spot platinum <XPT=> rose to a high of $2,230/2,237 an ounce
from $2,163/2,170 late in New York on Friday. It hit a record of
$2,230 an ounce on Feb. 22 as problems with power supply disrupted
mining in main producer South Africa.
A South African minister said on Friday the country's mining
industry would get priority under measures aimed at cutting
electricity use to solve a power crisis. []
Palladium <XPD=> rose to $576/580 an ounce, its highest in more
than six years, from its previous finish of $563/568 late in New
York.
(Additional reporting by Atul Prakash in London and Lewa Pardomuan
in Singapore; Editing by Marguerita Choy)
