NEW YORK (Dow Jones)--Gold futures set fresh highs Monday on support from a weaker dollar, stronger crude and equities, supply disruptions and options-related buying, market watchers said. Platinum and silver also hit new peaks.
Nearby January gold rose $16.60 to settle at $927.10, a fresh all-time front-month high on the Comex division of the New York Mercantile Exchange. Most-active April gold jumped $16.60 to $932.80 after reaching a fresh contract high of $935.40.
February gold gained $16.40 to settle at $927.10 after hitting a fresh contract high of $929.80. Shortly after pit trade closed, the February contract at the Chicago Board of Trade was up $16.30 to $927.
Shortly after New York gold closed, the U.S. dollar was down more than 0.6%, Nymex March crude was up 38 cents and the Dow Jones Industrial Average was 109.17 points higher.
Fund buying helped extended gold futures' gains during trading as equities and oil mounted a comeback, the dollar was weaker and rolling blackouts affecting South African mines continued to support the market, said Andrew Montano, director of precious metals at Scotia Mocatta.
Frank Lesh, broker and futures analyst with Future Path Trading, said the power disruptions in South Africa, weren't as much of a support as the dollar's weakness and oil's recovery.
"It might limit gold production somewhat, but there's a lot of gold out there" from other sources, he said.
Economic data lent support as well.
"A fresh day of records was inked into the history books after new home sales data emboldened speculators to lay more money on the line," Jon Nadler, senior analyst with Kitco Bullion Dealers, said in a research note.
New-home sales fell 4.7% to an annualized rate of 604,000 last month, when the consensus forecast had been for 650,000.
Options-related buying also boosted the yellow metal as participants bought back previously sold positions and entered into new long trades.
"We're seeing new longs coming into the market," a New York floor contact said.
Further, as February options were set to expire Monday, participants were trying to keep February gold futures contracts above $920 an ounce before they rolled into April contracts, he said.
The options expiration was spurring the short covering as some foreign miners were trying to cover options trades, said George Gero, vice president with RBC Capital Markets Global Futures.
But Gero cautioned that the gold market was waiting for central bank actions, and "continued strength may weaken after first-notice day."
First-notice day for February gold futures is Thursday.
Silver futures followed gold and other commodities higher as the dollar fell and oil strengthened, Lesh said.
Comex March silver settled at $16.75 an ounce, up 26 cents, after hitting a contract high of $16.795. Shortly after it closed, CBOT March silver was up 28.3 cents to $16.75.
"The real fireworks were seen over in the platinum pits," Kitco's Nadler said. "In a delayed reaction to last week's news, the noble metal (gained) on actual as well as feared supply issues related to South African power shortages."
Nymex April platinum rose $48.60 to settle at $1,728.70 after hitting a contract high of $1,733. Nearby January platinum settled at an all-time front-month high of $1,752.20 after rising $71.50. March palladium settled at $391.35 an ounce, up $5.90.
Platinum futures continued their "spectacular surge" as power shortages hamper South African production, and palladium gained "as investors bought it as a relative value trade," a BNP Paribas research note said. The metal's "attractiveness as a substitute for platinum is growing rapidly," the note said.
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