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Money News

Gold near $1,000 target, silver hits 27-year high

SINGAPORE (Reuters) - Gold roared to another record on Thursday and held within sight of the next target of $1,000 an ounce, as the dollar struck an all-time low against the euro and oil stood near $105 a barrel.

A woman is seen looking at a gold car on display at China International Jewellery Fair in Beijing in this November 5, 2007 file photo. Gold roared to another record on Thursday and held within sight of the next target of $1,000 an ounce, as the dollar struck an all-time low against the euro and oil stood near $105 a barrel. REUTERS/Claro Cortes IV

Silver struck a 27-year high on speculative buying, platinum was below an historical high, New York’s COMEX futures held near records around $995 an ounce, and Tokyo’s platinum futures hit a new peak before ending lower on profit taking.

Spot gold jumped as high as $991.90 an ounce, mainly driven by speculative buying, up from $985.70/986.50 late in New York on Wednesday.

Trading was volatile on Thursday, with early selling dragging down the price to as low as $983.90 an ounce before speculative buying accelerated on dollar weakness, and pushed the price to new highs.

“The market is nervous. We don’t see any physical buying,” said Ellison Chu, senior manager at Standard Bank London in Hong

Kong.

“Some people expect it to touch $1,000 soon on gold, but some also expect a big correction soon. It’s mixed,” said Chu, referring to current market sentiment.

Gold has gained as much as 19 percent in 2008 as funds, speculators and investors pour money into precious metals on expectation of further interest rate cuts in the United States and record-high oil, which lift its safe-haven appeal.

“There is psychological resistance at $1,000, but it’s a matter of time to see gold break through that level,” said Shuji Sugata, manager Mitsubishi Corp Futures and Securities Ltd.

Crude oil held steady on Thursday at $104.40 a barrel, after hitting a record near $105 a barrel the previous day, aided by OPEC’s decision to keep output levels unchanged and U.S. government data showing a surprise drop in crude inventories.

Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange rose $2.8 to $991.3 an ounce, near its record high of $995.20 hit on Wednesday.

“It’s difficult to say at this juncture if we will touch the $1,000 mark. I guess it really depends on how long oil prices remain above $100,” said Darren Heathcote of Investec Australia.

The dollar fell to a record low against a basket of major currencies as weak U.S. service sector and employment data kept alive fears of a recession.

The dollar hit an all-time low against a trade-weighted basket of major currencies, with the dollar index falling as low as 73.192.

Silver hit an intraday high of $21.18 an ounce, its best level since Oct. 1980, up from $20.61/20.66 an ounce late in New York as a tumbling dollar spurred another round of speculative buying.

Spot platinum fell to $2,235/2,245 an ounce from $2,240/2,247 an ounce. Spot palladium fell to $548/552 an ounce from $552/556 an ounce.

The most active platinum contract on the Tokyo Commodity

Exchange, currently February 2009, hit a new record at 7,427 yen per gram before ending 20 yen per gram lower at 7,307 yen.

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