NEW YORK, Aug 12: Gold looks primed to reach its priciest since June 1988 as fund money pours back into the market, sparked by dollar weakness and high oil prices, traders and analysts said on Friday.

But even though bullion and gold futures both hit eight-month highs in the session, the market was looking more volatile at such lofty levels, as profit-taking shaved off some of the rally’s sharp gains in the afternoon.

Gold surprised many on Thursday when it jumped by more than 2 per cent. The market then paused overnight in Asia trade, before shifting into higher gear in Europe and later in New York to reach $449.30 an ounce in the spot market.

“With the weak dollar and oil price high, they (bulls) are keen to press home their advantage,” one gold trader said. “If they can get it over $450, then we can go to $455 very quickly and the highs from last year.”

But he added he was very wary of current price levels.

Last December, bullion touched its highest since mid-1988 when it peaked at $456.75, and it has made three unsuccessful attempts at that level so far this year.

Spot gold was up $1 on the day, last fetching $446.30/447.10, compared with Thursday’s late New York quote at $445.30.—Reuters