Platinum, gold highest in decades

Gold in New York rose to the highest in almost 18 years, nearing $500 ( U. S.) an ounce, on concern that accelerating inflation will erode the value of stocks and bonds. Platinum topped $ 1,000 an ounce for the first time since 1980.

Gold jumped 13 per cent this year, outperforming the Dow Jones industrial average and the 10- year Treasury note. “ People are gaining faith in gold,” said Dennis Gartman, economist and editor of Gartman Letter. “ The platinum group of metals is being dragged along by the inherent strength in the gold market.”

Gold futures for December delivery rose $ 6.20, or 1.2 per cent, to $ 498.30 an ounce on the Comex division of the New York Mercantile Exchange. The most-active contract last breached $500 on Dec. 14, 1987. Futures for delivery in 2006 already have climbed above $ 500.

Platinum for January delivery rose $ 16.80, or 1.7 per cent, to $ 1,001.10 an ounce on the Nymex. Platinum, up 16 per cent this year, reached $ 1,189.50 on March 5, 1980, the highest since trading started in 1956.

Investors are buying gold to guard against rising energy prices, which are fuelling inflation, traders said.