Metals - Gold hits new 28 year peak, platinum surges to new record high UPDATE

Metals - Gold hits new 28 year peak, platinum surges to new record high UPDATE

	Published : Mon, 15 Oct 2007 11:09 By : Agencies Print this Story

(Updates prices, adds details)

LONDON (Thomson Financial) - Gold rose to a 28-year peak as the dollar weakened further against the euro and as oil prices held near new record levels set on Friday, sparking inflation concerns.

Meanwhile, platinum set a new all-time record on continuing supply worries in South Africa.

On Friday, the country's largest mining union said it plans a one-day strike over deaths and accidents at mines.

The news came amid continuing supply disruptions at Anglo Platinum's facilities in South Africa. The disruptions are a result of power outages in the country that began last week and could last through this week.

'Platinum ... continues to hold the most bullish forecast of the precious complex as the already tight fundamentals could be made tighter still should South African mine workers strike,' said TheBullionDesk.com analyst James Moore.

At 11.04 am, spot platinum was quoted up at 1,422 usd per ounce against 1,417 usd in late New York trades on Friday, having earlier set a new all-time record high of 1,425.00 usd per ounce.

Spot gold was up at 755.93 usd per ounce against 748.75 usd in late New York trading, having earlier climbed to 756.58 usd -- its highest point since January 1980.

The dollar has weakened sharply against the euro in European trading hours today, with investors awaiting a speech on the economic outlook this evening from US Federal Reserve chairman Ben Bernanke.

There are hopes the Fed chairman will give clues on future interest rates moves. Last month the Fed slashed rates by 50 basis points.

The move weighed heavily on the dollar and boosted gold as it increased the metal's appeal as an alternative asset to the US currency. The rate cut also made gold, which is traded in dollars, cheaper for holders of other currencies.

Standard Bank trader Richard England said the Fed move to slash rates so aggressively last month was a gamble on inflation. On Friday, data showed the producer price index rose more than expected in September.

'The Fed has been caught between rock and a hard place ... it's a gamble with inflation and you only have to look at the history of gold when there's inflation concerns - it goes one way ...up,' said England.

Elsewhere, inflation concerns were underlined today as oil prices rose to new record levels in both New York and London amid supply worries linked to heightened tensions between Turkey and Kurdish rebels in northern Iraq.

High oil prices usually benefit gold as they tend to lead to rising inflation. Gold, seen as a safe haven asset that holds its value in times of economic turmoil, is often bought by investors as a hedge against inflation.

'Investors will continue to look to gold as a hedge against inflation, particularly with oil prices set to continue higher as winter approaches in the northern hemisphere,' said TheBullionDesk.com's Moore.

Elsewhere, silver was up at 13.96 usd per ounce against 13.79 usd, while palladium rose to 377 usd per ounce against 374 usd.

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