( Reuters ) - New York gold futures ended firmer near 28-year highs on Monday, absorbing profit taking in front of the psychological $750 an ounce level, and traders remained confident that the historic rally had further to run.
Dennis Wheeler, chief executive of silver and gold miner Coeur D'Alene Mines Corp, said that growing demand, shrinking supply, a declining dollar and inflation concerns would boost gold and silver prices.
"In fact, market events in the past two weeks indicate we might be in some type of a perfect storm for precious metals," Wheeler told analysts, buy-side fund managers and industry players at the annual Denver Gold Forum, which started on Monday and runs through Wednesday.
The active December gold contract on the COMEX division of the New York Mercantile Exchange settled 40 cents higher at $739.30, having traversed a range of $743.90 to $733.50 in overnight screen trade.
On Friday benchmark futures reached $747.10 and bullion rose as high as $739, levels last seen in January 1980, when gold reached its record at $850.
Dealers said a modest pull back in crude oil from last week's record highs was an excuse to take profits after gold rallied overnight on the back of a new low in the dollar.
After rallying to 28-year highs last week, traders said the market is confident that futures will see $800 an ounce in the coming months, though speculative length in the market was becoming an obstacle.
Traders may also be reluctant to take on new positions before the expiration of COMEX October options on Tuesday and over-the-counter options on Wednesday.
The CFTC said in its Commitments of Traders report on Friday that the net noncommercial position in gold futures rose to 141,650 contracts from 126,669 contracts in the week to last Tuesday.