* Investors cash in the week's 5 pct gains
* SPDR Gold Trust holdings hit new record of 1,024.09 tonnes
* Impala Platinum cuts output targets for 2009 and beyond
(Updates throughout, changes dateline - pvs TOKYO)
By Jan Harvey
LONDON, Feb 19 (Reuters) - Gold eased from the seven-month
high it hit earlier on Thursday as investors took profits, while
traders said an uptick in interest in other assets such as
equities was also diverting interest from bullion.
But the precious metal is likely to be gathering strength
before another push towards fresh highs above $1,000 an ounce,
on burgeoning interest in the metal as a haven from risk,
analysts say.
Spot gold <XAU=> eased to $971.10/972.70 an ounce at 1010
GMT from $984.50 late in New York on Wednesday. Earlier it
touched a peak of $985.95 an ounce, its strongest level since
July 15.
"I still think we will test $1,000, but the market is
extremely long now and we have some profit-taking," said
Deutsche Bank trader Michael Blumenroth. "People are scared, so
there is still a flight to safe havens at the moment."
Gold climbed nearly 5 percent this week to its Wednesday
peak, as fear over the outlook for the financial system and
fears over rising inflation in the longer term prompted
investors to buy gold as a safe store of value.
However, profit taking and a recovery of other assets such
as equities and the euro in early trade pushed the precious
metal down as much as 1.7 percent.
"If we see signs the stock markets are recovering, people
will come back to stocks," said Blumenroth. "If money comes back
to the stock market, it will come out of gold."
Investment demand for apparently safer assets is still
supporting bullion, however.
Canada-based brokerage Canaccord Adams said it has raised
its peak gold price scenario to $1,100 an ounce from $950
previously, citing strong demand for the metal as a haven from
risk and inflation prospects.
Buying of gold-backed exchange-traded funds in particular is
very strong. Holdings of the world's largest gold-backed ETF,
the SPDR Gold Trust <GLD>, rose 1.5 percent to a record 1,024.09
tonnes as of Wednesday. []
"Over the past month, inflows into the ETF have more than
equalled mine supply...and are close to matching our estimates
of total demand for gold," UBS strategist John Reade said in a
research note.
"This one category of buying is almost responsible for the
entire gold market, with other buying via futures, OTC, bars and
coins making up the balance."
Meanwhile the dollar lost 0.4 percent against the euro in
early trade, easing from three-month highs the previous day,
though worries about euro zone banks' exposure to struggling
eastern European economies capped gains in the single currency.
[]
While a weaker dollar typically benefits gold, both assets
are for the moment responding to risk aversion, as they are seen
as key havens from risk.
Gold's other main external driver, the oil price, also
exerted little influence over the metal. Crude futures climbed
nearly 2 percent to just over $35 a barrel.
Among other precious metals, spot silver <XAG=> dipped in
line with gold to $14.15/14.21 an ounce from $14.32. Earlier it
peaked at $14.38, its strongest level since mid-August.
Spot platinum <XPT=> dipped to $1,074.50/1,079.50 an ounce
from $1,097.50, while spot palladium <XPD=> slid to $213/217 an
ounce from $217.
The chief executive of the world's number two platinum
producer Impala Platinum Holdings <IMPJ.J> said the company was
revising its production strategy in response to falling demand.
[]
He said Impala's output target for 2009 had been cut, and
that he sees lower metal output in the next 18-24 months.
Both platinum and palladium prices have fallen sharply in
the last year as demand from carmakers, the major users of the
metals, slumped.
"Uncertainty in the global automotive industry could mean
downside for platinum in the weeks to come," said Standard Bank
analyst Walter de Wet.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
