LONDON, Oct 19: A weak dollar, near record-high oil prices and simmering geo-political tensions sent gold to a 28-year high of $770 per ounce on Friday, while continued supply worries gave platinum fresh legs, helping it to record highs.

The dollar fell to a record low against the euro and a multi-decade trough versus a basket of currencies on a growing view that another US rate cut could be on the cards.

Dollar weakness makes gold cheaper for non-US investors and a rate cut also reduces the US currency’s yield appeal.

Gold is still largely a dollar story. There’s a perception in the market that the dollar is going lower, and people are buying into that, said Stephen Briggs, economist at SG Corporate and Investment Banking.

Spot gold hit a high of $770 an ounce, its highest since January 1980, before paring gains to $768.50/769.30 by 1042 GMT compared with $763.90/764.70 seen late in New York on Thursday.

Gold has gained some 20 per cent this year on fund buying driven by favourable currency fundamentals and sharp rises in oil that highlight the metal’s role as a hedge against inflation.

More recently it has gained from geo-political tension between Turkey and northern Iraq.

You have to believe there will be a substantial correction before the $800 level, he said.

Further momentum gathered on platinum, taking the market to a record high above $1,450 as supply worries continued to dog the market.

Anglo Platinum, the world’s biggest producer, said it expects to lose up to 1,300 ounces of refined platinum a day after it closed two more shafts at its largest mine.

Dealers and analysts said concerns over supply due to accidents and possible strike action had pushed up one-month lending rates in the past month to between 5-6 per cent -- another factor propelling the spot price higher.

Spot platinum hit a record high of $1,454/1,457 up from $1,438/1,443 quoted late in New York on Thursday.

In other bullion markets, the benchmark August 2008 contract on the Tokyo Commodity Exchange closed 3 yen per gram higher at 2,873 yen after trading as high as 2,883 yen.—Reuters