LONDON, May 22: Gold dropped on Thursday as investors booked profits after pushing up the price to its highest level in more than a month above $930, but more gains may be in store with oil hitting another record.

Spot gold fell to $926.00/927.00 an ounce from late New York levels of $928.55/929.75, having earlier jumped to $935.30 an ounce — its highest level since April 18.

Oil roared to an all time high above $135 an ounce on supply worries and the weakening US dollar, triggering fears of inflation and elevating gold’s safe-haven appeal.

I think the confidence is back in the market. We broke $900. We broke $930, said Frederic Panizzutti, metals analyst at MKS Finance.

So definitely we see some potential for higher levels again. The psychological (resistance) is $950, then probably $980 and there is of course the psychological $1,000 level. Despite the gains, gold was still more than $100 away from record high of $1,130.80 an ounce hit on March 17 and some analysts remained cautious.

There are enough supply constraints and there is no dearth of bullish outlook on crude oil from various institutions and organisations. These one-way outlook adds fuel to the fire, propelling gold along with it, said Pradeep Unni, analyst at Vision Commodities in Dubai.

In industry news, China, already the world’s top gold producer, could become an even bigger force with the expected discovery of several large deposits in the next five years, a leading explorer said on Wednesday.

Spot platinum fell to $2,183/2,203 an on ounce from $2,188.50/2,208.50 ounce late in New York, having earlier hit a two-month high at $2,216 an ounce.

Precious metals refiner Johnson Matthey said this week that the metal, used in jewellery and auto catalysts, could spike to a record high of $2,500 this year due to fears of a supply deficit.

Platinum struck a record high of $2,290 on March 4 after a power crisis in main producer South Africa disrupted mining.

Spot silver edged down to $17.98/18.04 an ounce from $18.01/18.09 in late New York.Spot palladium fell to $451.50/459.50 an ounce from $454/462 an ounce.—Reuters