* 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 prices, adds comment)
By Jan Harvey
LONDON, Nov 23 (Reuters) - Gold hit a record high at
$1,167.45 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 $1,165.45 an ounce at 1002 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 $19.10 to $1,165.90 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 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
POISED FOR GAINS
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... 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."
Investment buying has also been encouraged by a spate of
acquisitions of gold by central banks, most notably that of
India, whose purchase of 200 tonnes of the precious metal from
the International Monetary Fund was announced in early November.
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, Indian gold buying
cooled after picking up slightly last week as prices hit record
highs and the flow of scrap eased, dealers said. []
"Buying is negligible compared to the regular daily
volumes," said a dealer with a state-run bank in Mumbai.
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 $1,472.
Spot platinum <XPT=> was at $1,470 an ounce against $1,441,
while palladium <XPD=> was at $369 against $361. Spot silver
<XAG=> was bid at $18.81 an ounce against $18.46, having earlier
hit a peak of $18.88, its strongest since July 2008.
ETF Securities said holdings of its platinum- and
palladium-backed exchange-traded commodities rose to record
highs on Friday.
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 William
Hardy)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
