By Amanda Cooper
London - Gold rallied to six-month highs on Thursday, ahead of a European Central Bank news conference that could outline the bank's plans to tackle the debt crisis and draw fresh investment in the bullion market.
The platinum price rose to a new five-month high, swept higher by a broad investor push into precious metals, while world number three producer Lonmin and several South African unions signed a peace deal aimed at ending a deadly three-week strike.
The ECB left the euro zone benchmark rate at 0.75 percent, as expected, l eaving the focus on comments due later from bank president Mario Draghi, who is under pressure to deliver the framework of a plan to buy sovereign bonds to contain indebted nations' borrowing costs and, by extension, the debt crisis.
Gold, which benefits from an environment of low interest rates and support for the euro that drives it up against the U.S. dollar, could make fresh highs if the ECB gives enough detail of its plans to salvage the single European currency.
Spot gold rose 1.0 percent to $1,709.46 an ounce by 1147 GMT, around its highest since March this year.
Gold priced in euros showed a 0.7 percent gain on the day, rising to 1,352.32 euros an ounce, having hit a fresh peak for 2012 of 1,355.98 euros earlier, its highest since Sept. 12 last year, the day the price hit a record 1,373.92 euros.
“There is a bit of buying the rumour here and whether we see any correction on the facts or not, we will have to wait and see,” Tom Kendall, an analyst at Credit Suisse, said.
“What is clear is the break of $1,700 is going to pull in some additional momentum-following money. I think it will give further encouragement to those who are invested in physical (gold) and it is adding confidence to those who are already exposed...so this could be sustained,” he said.
Draghi is expected to flesh out enough details of the plan to back up the promise he made in late July to do “whatever it takes” to preserve the euro. The governing council began meeting at 0700 GMT on Thursday. - Reuters