Prices were helped by heavy bullion buying in London, with demand from European speculators buying against option contracts. Dealers also reported interest from US computer- driven fund accounts and Middle Eastern investors.
In London, gold was fixed in the morning at dollars 397.25 and peaked at dollars 399.50, a new high since the Gulf war in 1991. But it quickly fell back on profit taking, and in the afternoon the price was fixed lower at dollars 395.80 and closed at dollars 396, up more than dollars 4.
Gold has now risen about 20 per cent in recent months after touching seven-year lows of dollars 326 in March, leaving many analysts feeling extremely bullish. 'There has been a massive change in sentiment - it's like a runaway train. I think this is just the first attempt at dollars 400 and by the end of the week it will go through it,' said Emil Morfett, metals and mining analyst with Smith New Court.
Silver and platinum prices also rallied sharply only to fall back later in line with gold. Silver was fixed at just under dollars 5.17 an ounce, the highest since August 1990, but later declined to dollars 5.09, up 5 cents. Platinum reached dollars 408.75, up dollars 4.50 and its highest since March 1991, but retreated to dollars 406.25.
The currency markets showed little reaction to the hopeful trade news from Tokyo. Sterling slipped by nearly 2.6 pfennigs and 1 cent to close at DM2.54 and dollars 1.4925.Reuse content