LONDON, May 12: Platinum extended sharp gains to set a new all-time peak on positive supply-demand outlook and dollar weakness on Friday, while gold matched a 26-year peak on strong investor interest.

Prices of platinum, mainly used in jewellery and in car exhaust systems, were seen volatile ahead of the Platinum Week in London starting on Monday and release of an industry report by Johnson Matthey, the world’s top platinum distributor.

Gold matched Thursday’s 26-year price highs and was expected to gain further, supported by the dollar that declined to fresh one-year lows against major currencies.

Spot gold rose as high as $726 an ounce before settling at $724.10/725.10, up from $721.60/722.60 in New York.

It had hit a record high of $850 in January 1980. Adjusted for inflation that would equate to about $1,500 an ounce now.

J.P. Morgan lifted its forecast for gold prices to $669 in 2006 and $756 in 2007 from $566 and $609 respectively.—Reuters