Gold, platinum hit record highs, more upside seen

By Atul Prakash

LONDON (Reuters) - Gold and platinum soared to historic highs on Thursday as speculators and investors snapped them up amid strong oil prices and expectations for further U.S. interest rate cuts, analysts said.

Gold's allure as a hedge against inflation and a safe-haven asset got a boost as oil briefly rose to a lifetime high above $100 a barrel and the dollar tumbled.

"Even here, I will buy gold. I don't think the upside is finished yet. I think $900 is very real and there is nothing to suggest that it wouldn't go higher than that," said Peter Hillyard, head of metals sales at ANZ Investment Bank.

"The dollar continues to be important, but is not sufficient in itself to drive gold. It needs other factors, such as higher oil prices and the geopolitical situation. As the year develops, the situation in Pakistan is going to become complex."

Spot gold rose as high as $869.05 an ounce and was quoted at $862.90/863.60 in New York's at 2:15 p.m. EST (1915 GMT), up from $855.70/856.50 late in New York on Wednesday.

The price of gold jumped more than 30 percent in 2007, its biggest annual gain since 1979.

The most-active gold contract for February delivery settled up $9.10, or 1.1 percent, at $869.10 an ounce on the COMEX metals division of the New York Mercantile Exchange. It set a fresh contract high of $872.90.

The dollar fell against the euro on Thursday, though it was off session lows after an employment report eased fears about U.S. payrolls data due to be released on Friday.