(Updates prices)
By Lewa Pardomuan
SINGAPORE, March 14 (Reuters) - Spot gold jumped on Friday
and held within sight of the $1,000-an-ounce barrier broken on
the futures market after the dollar hit a record low against
the euro, boosting the metal's appeal as an alternative
investment.
Gold has gained nearly 20 percent in 2008, driven by buying
from investors and speculators on expectations of further
interest rate cuts in the United States and record high oil
prices, which raised its appeal as a hedge against inflation.
Spot gold <XAU=> rose to $997.20/998.00 an ounce from
$991.00/991.80 late in New York. It had powered to another
record high of $999.90 an ounce on Thursday.
Platinum and palladium held below their recent highs, while
silver tracked firm bullion.
"Providing oil prices maintain a dizzy height and the U.S.
continues to suffer, it looks extremely likely that gold will
test the $1,000 level and likely break through it," said Darren
Heathcote of Investec Australia in Sydney.
"But it may see some profit-taking as we get there, which
may hold its rise initially before possibly progressing on to
$1,004 to $1,005 an ounce," said Heathcote, who expected gold
to hit $1,000 later on Friday.
Gold futures for April delivery <GCJ8> on the COMEX
division of the New York Mercantile Exchange added $4.7 an
ounce to $998.5, having struck a record $1,001.50 on Thursday.
Gold hit $850 an ounce in January 1980 as high inflation
linked to strong oil prices, plus the Soviet intervention in
Afghanistan and the impact of the Iranian revolution, prompted
investors to buy the metal.
After adjusting for inflation, the 1980 high is equivalent
to $2,119.30 an ounce at 2007 prices, according to precious
metals consultancy GFMS Ltd.
In the physical sector, dealers saw sales of scrap as
jewellers cashed in on gold's rise but declines in stock
markets also encouraged funds to shift some of their money into
gold.
"There's, of course, some profit-taking but I guess people
are also cautious about what's going to happen after the price
hits $1,000. Some people are talking about gold hitting $1,100
and $1,200 in the middle of this year," said a dealer in Hong
Kong.
The dollar hit a record low against a basket of currencies
and fell back below 100 yen, with traders citing rumours of
more hedge fund failures, which stoked worries about credit
markets. []
"If the dollar continues to weaken, then, rather like the
price of oil, it'll be a long time before we see lower gold
prices," said Angus Campbell, head of sales at Capital Spreads,
in a note.
"Momentum is also being provided by many investors running
to gold as a safe haven in the face of credit woes and high
inflation."
Oil <CLc1> fell as investors booked profits after crude
powered to a record $111 a barrel on Thursday.
Spot platinum <XPT=> fell to $2,087/2,097 an ounce from
$2,098/2,108 an ounce. Palladium <XPD=> eased to $502/507 an
ounce from $508/513 an ounce.
Silver <XAG=> edged up to $20.61/20.66 an ounce from
$20.42/20.47 an ounce.
Precious metals prices at 0538 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 997.30 2.40 +0.24 19.77
Spot Silver 20.64 0.10 +0.49 39.74
Spot Platinum 2090.00 -8.00 -0.38 37.50
Spot Palladium 502.00 -6.00 -1.18 36.41
TOCOM Gold 3235.00 33.00 +1.03 5.72
44422
TOCOM Platinum 6591.00 23.00 +0.35 23.45
10103
TOCOM Silver 668.00 6.10 +0.92 23.48
2970
TOCOM Palladium 1670.00 -6.00 -0.36 23.61
3945
Euro/Dollar 1.5631
Dollar/Yen 100.03
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Nick Trevethan; Editing by Alan
Raybould)
