(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Jan 14 (Reuters) - Gold hit a record high above
$900 an ounce on Monday as turmoil in financial markets,
expectations of aggressive U.S. rate cuts and a falling dollar
helped raise the metal's safe-haven appeal.
Platinum also hit a record while silver touched a 27-year
peak.
Spot gold <XAU=> hit an all-time high of $909.30 an ounce,
against $895.70/896.50 in New York on Friday.
COMEX gold futures touched $911.20 an ounce, surpassing
Friday's record high of $900.10. The most active February
contract <GCG8> was later quoted at $910.0, up $12.3 an ounce.
Japanese gold futures <O#JAU:> were closed for a holiday.
"There is blue sky ahead of us and there is room for gold to
go higher. We are in an uncharted territory, really," said
Darren Heathcote of Investec Australia in Sydney. "We have a
weaker dollar and that's encouraged people to buy gold."
Investors have bought gold as a safe-haven asset after the
dollar dropped on expectations the Federal Reserve would cut
interest rates by an aggressive half-percentage point at its
Jan. 29-30 policy meeting to rescue the U.S. economy.
Fears of further subprime mortgage-related write-downs in
the U.S. financial sector and inflation fears driven by
record-high crude oil <CLc1> also attracted buying from
investors and speculators.
"I can see there's some short-covering here and there," said
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"Nobody knows what the next target is -- $910, or $920 and
even $950. We don't know. There's short-covering everywhere."
The euro jumped to $1.4880 <EUR=> on electronic trading
platform EBS, its highest level since late November and within
sight of a record high of $1.4968 hit that month.
"Dealers just don't sleep nowadays. Gold broke $900, and
there was buying on breakout. It was very, very fast," said a
dealer in Singapore.
But some dealers said gold could have trouble staying above
$900 as high prices were likely to turn away jewellery makers
and other physical buyers.
"I still think it's not sustainable. The physical sector is
not too enthusiastic to purchase here," said William Kwan, a
dealer at Phillip Futures in Singapore.
"On the speculative side, the small speculators have already
gotten out of their shorts," he added.
Gold's 14-day relative strength indicator (RSI) rose to
85.95 on Friday as gold hit a record, and hovered above 80 on
Monday. The market views an RSI of 30 or less as oversold and 70
or more as overbought.
In Singapore, dealers noted selling from holders who cashed
in on gold's gains as well as limited purchases from jewellers
at lower levels.
Platinum <XPT=> hit record high of $1,578 ounce, up from
$1,562/1,566 an ounce in New York.
Silver <XAG=> rallied to its highest in 27 years at $16.56
an ounce, up from $16.19/16.24 late in New York.
Palladium <XPD=> rose to $377/381 an ounce from $375/379.
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Precious metals prices at 0912 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 908.80 13.00 +1.45 9.14
Spot Silver 16.56 0.35 +2.16 12.12
Spot Platinum 1577.00 15.00 +0.96 3.75
Spot Palladium 377.00 2.00 +0.53 2.45
Euro/Dollar 1.4878
Dollar/Yen 107.82
(Additional reporting by Pratima Desai in London; editing by
Chris Johnson)
