* Gold rallies to record high as weak dollar fuels buying
* Technical momentum intact after correction late last week
* Traders eye U.S. options expiry, $1,200
(Updates throughout, previous SINGAPORE)
By Jan Harvey
LONDON, Nov 23 (Reuters) - Gold hit a record high at
$1,167.35 an ounce on Monday as dollar weakness pushed the metal
through key technical resistance levels, fuelling momentum
buying after the metal's sharp run higher earlier this month.
Spot gold <XAU=> was bid at $1,165.55 an ounce at 0800 GMT,
against $1,148.20 late in New York on Friday. U.S. gold futures
for December delivery <GCZ9> on the COMEX division of the New
York Mercantile Exchange rose $19.20 to $1,166.00 an ounce.
Afshin Nabavi, head of trading at MKS Finance in Geneva,
said the metal's rise through technical stops had triggered
fresh buying.
"The way the market held the $1,130 support on Thursday and
Friday was very impressive," he said. "It looks like $1,200 will
be seen much sooner than expected."
The dollar extended broad losses on Monday, hitting a
six-week low versus the yen after comments from a Federal
Reserve official bolstered the view that U.S. interest rates
will stay low. []
Weakness in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Oil prices rose more than 1 percent, meanwhile, to top $78 a
barrel, after the U.S. dollar lost its footing and heightened
tensions between key oil exporter Iran and Western nations
raised speculation of a potential supply threat.
Strong oil prices raise the metal's safe-haven appeal
against inflation. For a graphic on gold, oil and dollar's
performance, click on the link:
http://graphics.thomsonreuters.com/119/MKT_GLD$OIL1109.gif
Technical analysts at Barclays Capital -- who study past
price charts to determine trends in future trade -- said in a
note that gold was poised for further gains.
"Gold has entered a seasonally bullish period (a long gold
strategy from November 18, taking profit on December 3 was a
winning strategy for the past nine years...) and is also
performing well when priced in the other major currencies," the
note said.
"Such a backdrop suggests higher prices (channel target at
$1,175) into year-end," it added.
CENBANKS FUEL INVESTMENT
Investment buying has also been encouraged by a spate of
acquisitions of gold by central banks, most notably that of
India, which bought 200 tonnes of the precious metal from the
International Monetary Fund.
"You've got more high-profile hedge funds visibly investing
in gold. That's yet another factor encouraging moves into gold
by the wider investor community," said David Barclay, commodity
strategist at Standard Chartered in Hong Kong.
Option traders are betting gold will hit $1,200 an ounce or
higher by early next year, and strong options interest could in
turn lift underlying prices further into uncharted territory.
On the physical side of the market, dealers in Asia noted
buy-backs and limited sales of scrap from jewellers due to
expectations that gold prices could rise further.
Nabavi said some light physical demand had been seen out of
Asia overnight.
Gold's gain lifted other precious metals, with platinum
hitting its highest since September 2008 at $1,467.
Spot platinum <XPT=> was at $1,466 an ounce against $1,441,
while palladium <XPD=> was at $366.50 against $361. Spot silver
<XAG=> was bid at $18.78 an ounce against $18.46.
For a timeline on gold's rise to record, click
[]
For a factbox on how to invest in gold, click on
[]
(Additional reporting by Lewa Pardomuan; editing by James
Jukwey)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
