NEW YORK/LONDON (Reuters) - Gold jumped on Thursday, hitting a one-month high as geopolitical tensions mounted, prompting a flight to safe-haven assets after a suicide bomber killed Pakistani opposition leader Benazir Bhutto.
Spot platinum set a historic peak, tracking gold with further support from positive fundamentals, traders said.
Precious metals also drew support as the dollar declined after November U.S. durable goods orders data came in weaker than expected.
Spot gold XAU=, seen as a safe-haven asset, rose as high as $830.05 an ounce, the highest since November 26. It was quoted at $824.60/825.40 at 4:30 p.m. EST (2130 GMT), against $823.00/824.30 in New York late on Wednesday.
U.S. gold futures for February GCG8 ended up $2.30 at $831.80 an ounce on the COMEX metals division of the New York Mercantile Exchange. It had risen to $835.50 during the session — also a peak from November 26.
The rally came after news that Bhutto was killed in a gun and bomb attack as she left a political rally in Pakistan, putting the country’s election on January 8 in doubt. <ID:nL2746814>
Gold prices usually rise in the face of political troubles, inflation and economic uncertainties.
“Instability in Pakistan is favorable for the market,” said James Moore, precious metals analyst at TheBullionDesk.com. “The markets are very thin and people are jittery. Any such news is going to create a larger reaction than you would normally expect to see.”
Gold has gained more than 30 percent this year.
Trading volumes in the bullion market were thin. with many players away or keeping positions light due to year-end holidays. But the outlook remained positive and analysts said they expected gold to advance in the new year.
Gold held in New York-listed StreetTRACKS Gold Shares (GLD.N) XAUEXT-NYS-TT, the world’s largest gold-backed fund, rose to a record high of 627.88 tonnes on Wednesday. It has surged nearly 40 percent this year.
Spot platinum XPT= rose to a record $1,542.00 an ounce.
The metal has gained almost 40 percent this year. “The overall fundamentals remain relatively bullish for platinum and there may be further gains ahead in the short-term, with fundamental supply concerns hanging over the market,” Standard Bank said in a report.
Supply disruptions at some mines in South Africa, the world’s top producer, have resulted in a deficit this year and are likely to leave the market in a deficit again next year.
Aquarius Platinum AQP.L AQPJ.J said last week it lost an attributable 250 ounces of platinum group metals a day due to a strike at its Marikana mine in South Africa. <ID:nL19321888>
Johnson Matthey (JMAT.L), the world’s top platinum refiner and fabricator, said in November the market would change course in 2007 and see a deficit of 265,000 ounces. It had a surplus of 65,000 ounces in 2006 after seven successive years of deficits.
Additional reporting by Veronica Brown in London and Chikafumi Hodo in Tokyo