rose $1 to $448 an ounce on the New York Mercantile Exchanges COMEX division by 10:15 a.m. EST (1515 GMT), trading between $446.10 and $448.20.Gold reached $448.50 on Friday, which was its highest price since July 1988, as a weak dollar improved the buying power of dollar-priced gold for investors holding other currencies.
Trade was thin as some participants kept to the sidelines ahead of this weeks U.S. Thanksgiving holiday. COMEX and NYMEX metals will be closed on Thursday and Friday.
«The market is in a holiday spirit as the dollar is getting clobbered, and the surprise sharp increase in oil last week is another factor that would be bullish for gold and silver,» said Frank Aburto at F.C. Stone.
The dollar slid back toward last weeks record low versus the euro Monday after a weekend meeting of world finance chiefs ended with no agreement to stem the greenbacks decline.
Analysts believe gold should hit $450 sooner rather than later, based on continued weakness in the dollar, but they also remained concerned over the massive speculative net long position on COMEX.
«Gold has been riding higher primarily on U.S. dollar weakness and we see that market as due for a technical correction as well, with too many players now leaning too heavily in one direction since everyone knows the dollar is going to trend lower,» said IFR Markets analyst Tim Evans.
After Fridays close, weekly Commitments of Traders data from the Commodity Futures Trading Commission showed funds boosted their net long position in COMEX gold futures to 123,001 contracts as of Nov. 16 from 117,853 lots a week earlier.
Support was seen down near $440 and then $430 and $425, should the market decide to retreat.
The president of the Bundesbank, the German central bank, said Monday it aims to decide before year-end if it will use an option to sell gold under an agreement between European central banks.
Analysts expect them to dispose of every ounce of gold they can under the European Central Bank Gold Sales Agreement, a five-year sales pact that came into force at the end of September. The pact raised the limit on gold sales by its 15 signatories over the next five years to 2,500 tonnes from 2,000 tonnes in 1999-2004.
Players were starting to transfer positions in active December gold into the February futures before delivery begins next month, and most traders should be out of December by Wednesday, Aburto said.
«By then, I dont think therell be anything that favors the dollar, so gold will be either flat or higher,» he said.
The euro was about flat at $1.3033 and not far off from Thursdays all-time high against the dollar at $1.3074.Spot gold hit $447.40/8.10, versus Fridays late quote in New York at $446.65/7.40. The afternoon fix in London was at $447.80. Bullion on Friday spiked to $447.65, its highest since July 1988.December silver was unchanged at $7.60 an ounce, trading from $7.565 to $7.66. Spot silver rose to $7.59/62 from $7.56/59 previously. Londons fix was at $7.615.January platinum fell $7.20 to $852.50 an ounce. Spot platinum was worth $851/855.December palladium lost $1 to $219.30 an ounce. Spot palladium hit $214/218.
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