(Corrects New York silver prices in the last paragraph)
(Update prices to Tokyo futures close)
By Chikafumi Hodo
TOKYO, Jan 9 (Reuters) - Gold hit a historic high for a
second straight day on Wednesday as investment funds ploughed
money into the market on the metal's bullish trend, supported by
a weak dollar and strong oil prices.
Spot gold <XAU=> surged to a new record of $891.40 an ounce,
surpassing the previous record of $881.10 reached on Tuesday,
with the market gaining momentum after the key Japanese gold
futures price <0#JAU:> hit its highest level since March 1984.
The debut of gold futures on the Shanghai Futures Exchange
helped boost the spot price to the high.
Bullish gold prices also pushed up cash platinum <XPT=> to
an all-time high of $1,556 an ounce, $1 more than the previous
record hit on Jan. 4.
Gold drifted down from the high, but traders were keen to
buy the metal on dips.
By 0845 GMT, cash gold was trading at $885.00/885.70,
compared with late New York levels of $878.10/878.90.
"Gold is bullish. Funds are pouring into markets as they are
performing well when stocks are slumping," said Tatsuo Kageyama,
an analyst at Kanetsu Asset Management in Tokyo.
"The speed of gold's rise is very fast but the market is
focusing on taking gold towards $900 in the near term."
COMEX gold futures rose in line with the spot price in Asia.
The most active February contract <GCG8> was up $5.20 or 0.6
percent from New York at $885.80.
The key gold futures contract for December 2008 delivery
<0#JAU:> on the Tokyo Commodity Exchange (TOCOM) finished at
3,134 yen a gram, up 37 yen or 1.2 percent from Tuesday.
It had reached an intraday high 3,173 yen, the highest for a
benchmark since March 1984.
Tokyo traders said investment funds are putting money into
gold and other commodities from the start of the year,
anticipating for a big return.
"Funds are buying. For instance, index funds are rebalancing
their portfolios at the start of the year, putting more funds
into gold and commodities based on their performance last year,"
said Hiroyuki Kikukawa, an analyst at IDO Securities in Tokyo.
Gold rose more than 30 percent in 2007, its biggest annual
gain since 1979.
SHANGHAI GOLD LAUNCH
Gold was gaining in appeal as the market sought higher
returns with U.S. shares slumping and prospects for the U.S.
economy deteriorating, especially after poor jobs data last
week.
U.S. stocks fell sharply on Tuesday after phone company AT&T
<T.N> said it was experiencing softness in its consumer
business, sparking more concerns about the economy.
Investors were also convinced to buy gold due to lingering
geopolitical tensions in the Middle East, rising energy prices
and weakness in the dollar.
U.S. crude oil futures advanced on Wednesday after gaining
over a dollar in the previous session amid threats of violence
in Nigeria and expectations that U.S. government data due out
later in the day will show another fall in crude supplies last
week.
Frontmonth U.S. crude for February delivery <CLc1> was up 44
cents at $96.77 a barrel on the Globex electronic trading
platform after settling up $1.24 at $96.33 a day earlier.
NYMEX crude hit a record $100.09 last week.
China's first gold futures contract <0#SHAU:> surged in its
debut on Wednesday as traders pushed the price to a hefty
premium over global peers on a day when spot gold hit record
highs. []
The June futures contract opened at 230.95 yuan a gram, up
nearly 10 percent from the base price of 209.99 yuan set by the
Shanghai Futures Exchange. It briefly hit its upper cap of
230.99 yuan before retreating to 224.66 yuan a gram by the
midday break.
"The launch of Shanghai gold is positive for the gold market
as a whole. Participation of Chinese players would help gold
become more active during Asian time," IDO's Kikukawa said.
Other precious metals rose in line with gold, with platinum
reaching a record high as TOCOM platinum futures <0#JPL:>
jumped.
Platinum <XPT=> rose to the record high of $1,556/1,560 an
ounce, from $1,547/$1,552 late in New York.
Palladium <XPD=> was flat at $376/379 an ounce, while silver
<XAG=> rose to $15.95/16.00 an ounce from $15.70/15.75 late in
New York.
Precious metals prices at 0843 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 884.80 7.70 +0.88 6.26
Spot Silver 15.93 0.28 +1.79 7.85
Spot Platinum 1556.00 9.00 +0.58 2.37
Spot Palladium 376.00 0.00 +0.00 2.17
TOCOM Gold 3134.00 37.00 +1.19 2.42 173600
TOCOM Platinum 5337.00 24.00 +0.45 -0.04 49954
TOCOM Silver 563.60 18.20 +3.34 4.18 2081
TOCOM Palladium 1350.00 17.00 +1.28 -0.07 1089
Euro/Dollar 1.4712
Dollar/Yen 109.50
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Reporting by Chikafumi Hodo)
