Gold extends run-up on dollar and Pakistan tension
NEW YORK/LONDON (Reuters) - Gold surged to a one-month peak on Friday and was about $10 off record highs as the turmoil after the killing of Pakistani politician Benazir Bhutto and a weak dollar propped up the safe-haven asset.
Platinum was $8 away from matching Thursday's all-time peak of $1,542 an ounce as the precious metal, used mostly to refine automobile emissions, recovered from profit-taking.
The spot price of gold bullion traded up to $839.80 an ounce, its highest since November 26. By 4:10 p.m. EST, it was quoted at $839.10/839.90, against Thursday's late quote of $824.70/825.50 in New York.
Spot gold has gained 31 percent so far this year. In November, it came $5 short of a historic high of $850 an ounce on the back of a tumbling dollar and firm oil prices.
U.S. crude peaked near $98 a barrel in Thursday's session, below November's all-time high of $99.29, before ending lower on profit-taking.
Most-active gold futures for February settled up $10.90 at $842.70 an ounce on the COMEX metals division of the New York Mercantile Exchange on Thursday, after moving between $828.30 and $843.80.
In Asia, the benchmark December 2008 gold contract in Tokyo closed at 3,060 yen a gram, up 8 yen.
Analysts said much of the force driving both the physical and futures prices of gold came from global security concerns sparked by the assassination of Pakistan opposition politician Benazir Bhutto, a key U.S. ally.
"With the dollar under pressure and violent protests seen in Pakistan, it is likely that gold could see further safe-haven investment demand and potentially rise to challenge this year's high," said James Moore, a metals analyst at TheBullionDesk.com.
The dollar was down 0.3 percent against a basket of major currencies at 76.398 .DXY early in New York. It was down 1.7 percent on the week, on track for its worst weekly performance since late November 2006.
The currency on which much of the world trades fell after U.S. data showing a 9 percent decline in new home sales last month heightened investors' concern about the economy.
In industry news, the Shanghai Futures Exchange, one of China's three commodities futures bourses, plans to launch trade in the country's first gold futures on January 9, sources close to the exchange said.
Platinum fell as low as $1,527 an ounce before rising to $1,534/1,538 by 4:10 p.m. EST.
Platinum prices have jumped about 40 percent this year on concerns that production disruptions at some mines in South Africa, the world's top platinum producer, could leave the market in a supply deficit again next year.
Palladium was up $1 at $363/367 an ounce, while silver rose to $14.73/14.78 an ounce from $14.58/14.63.
(Additional reporting by Chikafumi Hodo in Tokyo; editing by Jim Marshall)
