Gold holds near record high on oil, weak dollar

Spot gold held near record highs on Friday in Asia as a rally in oil prices to more than $100 a barrel and a weak dollar supported the investment appeal of the precious metal.

Platinum hit a record high on Friday, before drifting lower.

Investment funds are flocking to gold, which jumped more than 30% in 2007, as a hedge against concerns that fast-rising oil and food prices will fire up global inflation.

An added investment boost is the weak dollar, which means dollar-denominated gold is relatively cheaper in other currencies.

”The trend for gold is so strong and it’s not wise to go against it now,” said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo.

Spot gold was trading at $863,60/864,30 an ounce at 6.50am GMT, slightly above $862,90/863,60 late in New York on Thursday when it hit a record high of $869,05.

Bullion reached as high as $866,80 on Friday, but then fell back slightly as some investors took profits ahead of the release later on Friday of US jobs data for December.

”Gold could rise further if tonight’s US job figures intensify concerns about the US economy and put more pressure on the dollar,” Kageyama said.

The jobs data could provide clues on how much the Federal Reserve may cut interest rates this month amid growing worries about a slowdown in US economic growth.

Platinum hit a record high of $1 553 an ounce on Friday, surpassing the previous record of $1 550/1 555 reached a day earlier. — Reuters

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