(Update prices to late afternoon)
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 $891.00 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 $1,554 an ounce, $1 more than the previous
record hit on Jan. 4.
By 0626 GMT, cash gold was trading at $888.00/888.70, up
about $9.90 from 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 jumped in line with the spot price in
Asia. The most active February contract <GCG8> was up $9 or 1
percent from New York at $889.30.
The key gold futures contract for December 2008 delivery
<0#JAU:> on the Tokyo Commodity Exchange (TOCOM) was trading at
at 3,157 yen a gram, up 60 yen or 1.9 percent from Tuesday.
It had reached an intraday high 3,161 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
32 cents at $96.65 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 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 by more 1 percent.
Platinum <XPT=> rose to the record high of $1,554 an ounce,
before drifting to $1,550/1,555 by late afternoon compared with
$1,547/$1,552 in New York.
Palladium <XPD=> was flat at $376/380 an ounce, while
silver <XAG=> edged up to $15.82/15.87 an ounce from
$15.78/15.83 late in New York.
Precious metals prices at 0626 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 887.20 10.10 +1.15 6.54
Spot Silver 15.82 0.17 +1.09 7.11
Spot Platinum 1550.00 3.00 +0.19 1.97
Spot Palladium 376.00 0.00 +0.00 2.17
TOCOM Gold 3155.00 58.00 +1.87 3.10
122153
TOCOM Platinum 5363.00 50.00 +0.94 0.45
36605
TOCOM Silver 561.70 16.30 +2.99 3.83
1467
TOCOM Palladium 1344.00 11.00 +0.83 -0.52
833
Euro/Dollar 1.4723
Dollar/Yen 109.59
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; Editing by Ben Tan)
