(recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, Feb 27 (Reuters) - Gold surged to a record high
above $960 on Wednesday as investors poured money, spurred by a
plummeting dollar and oil rising above $102 a barrel.
Silver rallied to its loftiest level since November 1980.
Palladium jumped to a 6-1/2-year high, while platinum gained 1.7
percent to trade near last week's record highs.
Spot gold <XAU=> rose as high as $964.70 an ounce and was
quoted at $958.40/959.20 at 1113 GMT, against $946.60/947.40 in
New York late on Tuesday. It has gained 16 percent this year.
"The main driver is the record low U.S. dollar, but apart
from that, gold should remain fairly well supported even if the
currency retracts," said Walter De Wet, precious metals analyst
at Standard Bank.
"There are not many alternatives out there right now.
Equities are currently high risk investments and still have
negative returns for the year. U.S. Treasury is a traditional
safe-haven, but there is also not a lot of value.
"And then what you left with is gold. There is room for gold
to move higher as there are pretty bullish conditions."
The dollar slid to an all-time low versus a basket of
currencies after weak data underscored the gloomy outlook for
the U.S. economy and comments from a top Federal Reserve
official cemented views for more U.S. rate cuts.[]
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil powered to a new record above $102 a barrel, closing in
on its inflation-adjusted peak, as a slumping dollar on
lacklustre U.S. economic data triggered a surge across
commodities markets.
"Despite the increased likelihood of IMF sales, its seems
investors are more concerned with the threat that
inflation/recession poses," TheBullionDesk.com said in a note.
"And with two of gold's key driving forces -- the dollar and
oil -- now into uncharted territory themselves, it seem
inevitable that gold will challenge new highs closer to $1,000."
GOLD VULNERABLE
The United States Treasury has reversed its opposition to
the sale of a limited portion of the IMF's more than 3,000
tonnes of gold stocks, the world's third-largest holding, and
was confident Congress would support the move.
"Sooner or later the market will adjust to the negative
news. We will have to wait and see whether the $1,000 an ounce
level will be reached before the correction," said Wolfgang
Wrzesniok-Rossbach, head of sales at Heraeus, a German metals
trading group.
U.S. gold futures also hit record highs. Gold for April
delivery <GCJ8> hit a high of $967.70 an ounce, up from
Tuesday's settlement of $948.90.
Investment into exchange-traded funds continued. The latest
data showed gold held by New York-listed StreetTRACKS Gold
Shares <GLD.N> <XAUEXT-NYS-TT>, the world's largest gold-backed
ETF, hit a record high of 639.44 tonnes -- a jump of more than
30 percent in the past 12 months.
In industry news, South Africa's Harmony Gold <HARJ.J> said
two workers had been killed in an earth tremor at its Elandsrand
mine, and that production had been stopped at the section where
the incident took place. []
Silver <XAG=> jumped as high as $19.43 an ounce before
falling to $19.29/19.34, against $18.65/18.50 late in New York.
Platinum <XPT=> rose to a high of $2,166 an ounce before falling
to $2,145/2,15, versus $2,130/2,140 on Tuesday.
Palladium <XPD=> rose as high as $557 an ounce, against
$523/528 in New York. It was last traded at $547/551.
(Additional reporting by Lewa Pardomuan in Singapore)
(Reporting by Atul Prakash; editing by Peter Blackburn)
