By Jan Harvey
LONDON (Reuters) - Gold hit 18-month highs on Wednesday as the dollar's slide to 2009 lows against the euro sparked buying of the metal as an alternative asset, helping lift silver and platinum to multi-month peaks.
The precious metal could be building up for an assault on its previous all-time high above $1,030 an ounce, set in March 2008, traders said.
Spot gold rose to a high of $1,020.50 an ounce and was at $1,015.10 an ounce at 1340 GMT against $1,005.90 late in New York on Tuesday.
Barclays Capital analyst Suki Cooper said given the extent of net speculative buy positions in COMEX-traded gold futures, conditions for gold are not as favorable as they were at the time of last year's record high.
Nonetheless, if the dollar keeps falling, gold could continue to climb, she said. "If we see currency movements becoming much more favorable -- if we see the dollar weakening substantially -- that is going to be a key support for prices."
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $10.20 to $1,016.50 an ounce.
The dollar slipped against the euro and the yen on Wednesday after U.S. Treasury data showed a sharp increase in net capital outflow from the United States in July.
The U.S. currency hit its weakest this year versus the euro earlier, with the single currency breaking $1.47 for the first time since December. The dollar came under pressure as investors moved to notionally higher-risk currencies.
Better-than-expected U.S. retail sales data and a statement from Federal Reserve chairman Ben Bernanke that the U.S. recession was most likely over on Tuesday have boosted interest in assets seen as higher risk.
World stocks hit 11-month highs on the news, while European shares also rose.
PHYSICAL DEMAND PICKS UP
Physical demand for gold picked up in Asia, home to some of the world's largest bullion markets, despite high prices having discouraged consumers throughout the year.
"India is still buying despite the high prices. Maybe they are afraid that prices will go up again," said a dealer in Singapore.
Gold's rally helped lift other precious metals, with silver and platinum -- both of which are largely industrial in use -- also hitting multi-month highs as base metals rose on the more positive economic outlook.
Silver prices rose to a 12-month high of $17.37 an ounce, and were later at $17.25, against $16.97 late on Tuesday. Its ratio to gold -- which measures its value compared to the yellow metal -- fell to 58.8 from around 64.5 a month ago.
Capital Gold Group, gold group, gold, gold prices, gold news, gold coins, gold bullion, gold IRA, IRA gold