TOKYO (Reuters) – Gold extended gains to hit a 28-year high on Tuesday, lifted by solid bargain-hunting due to strong energy prices and tensions in the Middle East, while Tokyo futures touch a 23-year peak.
Safe-haven gold buying intensified due to rising tension between Turkey and Iraq, with Turkey’s parliament expected to debate a request for authorization for an incursion into northern Iraq to deal with separatist Kurdish militants.
An early spell of selling was attributed to technical sales due to the precious metal’s recent sharp rise.
“There are plenty of factors to buy gold, with the latest tension between Iraq and Turkey drawing more demand to buy,” said Shuji Sugata, manager at Mitsubishi Corp Futures and Securities.
Cash gold was trading at $762.00/762.80 an ounce around 2:25 a.m. EDT, from $758.20/759.00 late in New York on Monday, after earlier hitting a 28-year peak at $762.60.
Benchmark TOCOM gold futures closed up 25 yen or 0.9 percent at the day’s peak at 2,907 yen a gram, the highest since October 1984.
It recovered from an intraday low of 2,866 yen.
The key contract has been on a steady uptrend since hitting a five-month low of 2,389 yen in mid-August, rising 21.7 percent since then.
COMEX gold futures rose in Asia, with the most active December contract trading up $4.8 at $767.00 from the New York settlement on Monday.
December COMEX gold was off a low of $759.3 in Asia.
U.S. crude oil futures rose to a record high of $86.79 a barrel on Tuesday amid fund buying triggered by tension between Turkey and Iraq and anxiety over winter supply.
Strong energy prices encouraged buying as gold is usually seen as a hedge against inflation.
The precious metal also often rises with geopolitical tensions as it tends to act as a safe haven in times of crisis.
Platinum was largely stable at $1,420/1,425 an ounce, from $1,421/1,425 in New York and off a session low of $1,411. It hit a record high of $1,428 on Monday.