LONDON, Jan 16: Gold rose to fresh 25-year highs in Europe on Monday as fund managers pushed more money into commodities and talk resurfaced of central bank buying.

Platinum jumped to a 26-year peak, while palladium scored its highest in just over a month.

Dealers said investors and fund managers had been buying precious metals because of high energy prices, global security worries and the dollar’s weak outlook. Concerns about bird flu were also cited.

Gold has added nine per cent this year and investment banks and trade houses have sharply raised their price forecasts.

Spot gold was at a new high of $560.10/560.60 a troy ounce, and up from New York’s late quote on Friday of $556.50/557.25.

Silver was set two per cent higher in London at 919 cents, while spot prices rose to $9.19/9.22 from $9.10/9.13.

The white metal has lagged gold and platinum in their latest move higher and remains unable to crack December’s 18-year high of $9.23 an ounce.

US markets are closed on Monday for Martin Luther King Day.

Traders attributed recent gold strength to talk of buying by a Middle East central bank. That could not be ruled out given current turmoil in the region, analysts said.

John Reade, analyst at UBS Investment Bank, said of the buying talk: Is it possible? Yes, for sure, but I have no evidence of it.

Iran does not report its gold reserves to the International Monetary Fund. As of December, Saudi Arabia held 143 tons.

Many players are recalling January 1980, when gold reached $850 an ounce, with the Middle East again a big factor.

Spot platinum touched $1,045 an ounce before dipping to $1,043/1,047, against $1,034/1,038 in New York on Friday.

Platinum, used in jewellery and to clean auto exhausts, hit its record high of $1,047.50 in March, 1980.

Palladium touched $283 an ounce before easing to $281/285, against New York’s $279/283.

Jewellers in China have been hit by weak margins, forcing them to turn to palladium and white gold — an alloy of gold and other light-coloured metals such as silver and palladium.—Reuters