SYDNEY (Dow Jones) — Gold climbed to yet another quarter century high late in Asian trading hours Thursday, paring back modest losses earlier in the session as some players booked profits, spurred by a slightly stronger US dollar.
Gold for immediate delivery peaked at $ 645.25 a troy ounce around 0800 GMT, its highest level in 25 years, driven by stoploss buying and short covering heading into European trading, said a Hong Kong-based trader.
Earlier in the day, the benchmark gold contract on Japan’s Tokyo Commodity Exchange traded up to its Y60 limit, setting at a multi-year high of Y2,440 a gram, spurred by sharp gains on New York’s Comex market overnight and a weaker yen.
Gold’s gains are part of an ongoing investor flow into commodity markets as zinc and palladium also traded at new all-time highs in Asia Thursday.
Sentiment for commodities in general and precious metals in particular remains strong as crude prices of over $ 72 a barrel keep inflationary fears alive and Mideast geopolitics maintain the appeal of safe haven investments.
In addition, indications the US Federal Reserve may be nearing the end of its monetary tightening cycle just as Europe and Japan appear to be moving in the other direction are boosting the appeal of dollar alternatives such as metals.
Traders and analysts said gold appears likely to test the psychological $ 650 level in the coming sessions.
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