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By Frank Tang and Lewa Pardomuan
NEW YORK/LONDON, May 20 (Reuters) - Gold surged above $920
an ounce on Tuesday, ending near its highest level in almost a
month as record-high oil prices fueled fears of accelerating
inflation.
Spot gold <XAU=> hit a high of $923.40 an ounce, its
loftiest level since April 22. It was at $920.20/921.40 by New
York's last quote at 2:15 p.m. EDT (1815 GMT), up from
$905.00/906.40 an ounce late in New York on Monday.
"Obviously the worries about inflation continue and are
getting worse," said Daniel Hynes, metals analyst at Merrill
Lynch.
"We think there will be more bad news coming out of the
woodwork in terms of the global economic picture, which should
help the gold market. I think consumers have to catch up a bit
with where we are now," Hynes said.
Oil jumped to a new record above $129 a barrel on Tuesday.
U.S. crude futures <CLc1> ended up $2.02 at $129.07 a barrel.
[]
Gold received a decisive hoist after oil investor T. Boon
Pickens told broadcaster CNBC he expected crude oil to reach
$150 per barrel during 2008.
Gold has lost more than 12 percent in value since spiking
to a record high of $1,030.80 on March 17, on profit taking and
a recovery in the U.S. dollar against other currencies. But
high oil prices, which raise fears of inflation, may offer
support.
However, a drop in global demand for the precious metal
caused some concern among bullion investors.
Demand for gold for jewellery, investment and other uses,
fell 16 percent compared with a year ago to 701 tonnes in the
first quarter of 2008 -- the lowest quarterly figure in five
years -- as bullion hit a record above $1,000 an ounce, the
World Gold Council said in a report. []
"We will probably see what we have seen in last several
months: stay up here for a little bit, trading sideways. moving
higher, and then you will see some profit taking," said Carlos
Sanchez, analyst at CPM Group in New York.
Sanchez said that gold was vulnerable to a test below the
$900 an ounce level especially if crude oil weakened.
U.S. gold futures for June delivery <GCM8> on the COMEX
division of the New York Mercantile Exchange settled up $14.40,
or 1.6 percent, at $920.20 an ounce.
Gold's gains and record high oil prices also gave platinum
a firm undertone but the metal was still below a two-month high
of $2,174 hit on Monday ahead of an outlook report by refiner
Johnson Matthey <JMAT.L>.
Platinum <XPT=> rose to $2,128/2,148 an ounce from
$2,139.50/2,159.50 late in New York on Monday.
Sentiment was bullish, with Johnson Matthey expecting the
platinum market to close 2008 in a significant deficit due to
output shortfalls. [].
"With ongoing power shortages likely, we would not be
surprised to see platinum prices continue to rally over the
months ahead during the South African winter," investment bank
Fairfax said in a report.
Platinum struck a record high of $2,290 an ounce on March 4
after a power crisis in main producer South Africa disrupted
mining and sparked fear of a supply deficit.
Spot silver <XAG=> rose to $17.61/17.67 an ounce,
outperforming gold's gains, sharply higher than $16.99/17.05
late in New York. Palladium <XPD=> eased to $442/450 an ounce
from its Monday close of $444/452 an ounce.
