LONDON, Nov 25: Gold hit fresh 18-year peaks on Friday as buying picked up in Japan after a holiday, but traders may have to wait until next week to take out the elusive $500 target when US markets reopen.
Gold peaked at $496.75 an ounce in early trade, its firmest since December 15, 1987.It was quoted at $496.60/497.35 an ounce, up from the previous day’s late quoted $493.10/493.90.
Most dealers expected the metal to run into selling just below $500. US markets, closed on Thursday and Friday for the Thanksgiving holidays, are due to reopen on Monday.
The funds are still happy to play around at these levels, said Darren Heathcote, head of trading at N M Rothschild in Sydney. They expect us to look to test the upside a little bit but I don’t necessarily at this stage think we are going to do $500.
Few doubted the metal would fail to test this psychologically important level soon, as more and more investors diversify into precious metals amid worries about inflation and geopolitics.
I think next week will be very busy, with people gearing up for $500 gold, David Holmes, vice-president commodities at RBC Capital market.
A breach of that level could trigger some profit-taking by investors who bought into the rally early on, but gold could spend a longer time above $500 this time round.
In December 1987, bullion held above $500 for just one day, while in early February 1983 it managed a few attempts, peaking at $509 before subsiding to around $340 by the end of that year.
Gold is loved so much by everybody at the moment, it is hard to say anything bad about it, Holmes added.
Other precious metals were firm, with platinum group metals aided by gains in Japanese futures.
Platinum rose to $985/989 an ounce from $977/980 late in London, tracking fund buying in Tokyo platinum futures.
Silver rose to $8.17/8.20 an ounce from $8.14/8.16. —Reuters
