Gold prices top the $700 mark

MAY 10, 2006 - New York -- Gold scratched the $700-an-ounce mark yesterday in New York, reaching a 26-year high, dropped back briefly then and continued to trade above that benchmark today.

The surge in gold prices is being propelled by increasing fervor among private and institutional investors in response to global tensions. Gold on the New York Merchantile's Comex exchange has gained 27 percent since Jan. 9, when Iran announced its resumption of nuclear research, says a report on Bloomberg.

The rise is also being driven by speculation that central banks, most notably in China, are expected to buy gold as they sell off their dollar reserves.Gold reached an all-time high of $873 an ounce in January 1980 after the Iranian revolution curtailed oil exports and triggered 12 percent inflation rate in the United States.

Platinum prices are also responding to the same influences that are driving gold prices upwards. Platinum reached another record, the second in two days, of $1,236.50 Tuesday.

Johnson Matthey, the world's largest platinum distributor, is expected to issue a bullish outlook on platinum in its annual survey, set for release Monday.