(Updates prices)
By Lewa Pardomuan
SINGAPORE, Jan 11 (Reuters) - Gold hit a record high near
$900 an ounce on Friday, driven by hopes of a half-point cut in
U.S. interest rates later this month that could raise the
metal's appeal as an alternative investment.
Spot gold <XAU=> rose as high as $898 before profit taking
kicked in, mostly led by Japanese investors. It was later
quoted at $890.90/891.70, still higher than $889.90/890.60 hit
late in New York on Thursday.
COMEX gold futures also hit a record high, with the most
active February contract <GCG8> rising as high as $899.9 an
ounce before slipping to $893.0, down $0.6 from Thursday's
close.
"We are not talking about $900 now. We are talking about
$1,000," said Ronald Leung, director of Lee Cheong Gold Dealers
in Hong Hong.
"Of course sentiment is really bullish, but I think the
more bullish the market is, the more dangerous it is," he said.
Leung expected gold to trade in $885 to $900 range on
Friday but said the market could succumb to heavy profit,
especially given the extent of long positions held by funds.
Gold, which rallied more than 30 percent in 2007, entered
the new year on a firm note, rising more than 7 percent on a
trail of market-friendly factors including a struggling dollar
and record high crude oil prices.
The dollar held near a five-week low against the euro after
U.S. Federal Reserve Chairman Ben Bernanke said the central
bank was ready to take "substantial" measures to shore up a
slowing economy.
Bernanke acknowledged the economy faces increased risks and
indicated the U.S. central bank is ready to cut interest rates
aggressively to support growth. []
The Fed already has cut rates a full percentage point since
September.
The euro was hardly changed at $1.4800 <EUR=>, having risen
nearly 1 percent on Thursday to be back near a five-week peak
of $1.4825 hit last week.
"The possibility of gold going to $900 is very real. We
wouldn't expect the sort of increase to be sustained over the
course of 2008, though," said David Moore, a commodity analyst
at the Commonwealth Bank of Australia.
"As we move into the second half of 2008, we believe the
environment will change. The U.S. dollar will start to
strengthen against the euro, oil prices may be slightly lower.
In that environment, we think the gold price could fall quite
roughly." Crude oil <CLc1> rose above $94 a barrel on
Friday after falling nearly $2 the previous day -- moving away
from the record high of $100.09 hit on Jan. 3.
The key gold futures contract for December 2008 delivery
<0#JAU:> on the Tokyo Commodity Exchange TOCOM hit an intraday
high of 3,182 yen per gram before ending the morning session 49
yen per gram higher at 3,166 yen.
In other precious metals, platinum <XPT=> rose to
$1,551/1,556 an ounce from $1,550/1,555 late in New York on
Thursday.
Silver <XAG=> eased to $16.11/16.16 an ounce from
$16.12/16.17 late in New York. The metal surged to a 27-year
high of $16.24 on Thursday.
Palladium <XPD=> gained to $375/379 an ounce from
$373/376.
Precious metals prices at 0213 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 889.10 -3.40 -0.38 6.77
Spot Silver 16.10 -0.02 -0.12 9.00
Spot Platinum 1551.00 1.00 +0.06 2.04
Spot Palladium 374.00 1.00 +0.27 1.63
TOCOM Gold 3166.00 49.00 +1.57 3.46
49112
TOCOM Platinum 5355.00 45.00 +0.85 0.30
14122
TOCOM Silver 571.30 18.80 +3.40 5.60
998
TOCOM Palladium 1343.00 10.00 +0.75 -0.59
133
Euro/Dollar 1.4790
Dollar/Yen 109.53
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by)
