(Recasts, adds fresh comment, background)
By Atul Prakash
LONDON, March 6 (Reuters) - Gold retreated from record highs
on Thursday as oil prices slipped, but the precious metal held
within striking distance of $1,000 a troy ounce as the dollar
struck an all-time low against the euro.
Spot gold <XAU=> jumped as high as $991.90 an ounce and was
quoted at $984.40/985.70 at 1603 GMT, up from an earlier low of
$959.45, but below the $985.70/986.50 late on Wednesday.
Traders said crude oil <CLc1> prices nearly $2 below the
record high of $105.97 a barrel set earlier on Thursday and some
profit-taking in thin markets were behind the fall in prices.
"Guess some speculators just got cold feet, maybe after the
news that power deliveries to mines in South Africa are going to
be raised to 95 percent," said Wolfgang Wrzesniok-Rossbach, head
of marketing at precious metals group Heraeus.
South Africa said it will let mines increase power
consumption from 90 to 95 percent of normal because the
country's power crisis has stabilised. []
Analysts still expect gold to break through the $1,000
level, but think it may take several forays.
Gold has gained nearly 20 percent in 2008 as funds,
speculators and investors poured money into precious metals on
expectation of further interest rate cuts in the United States
and record-high oil, which lift its safe-haven appeal.
The dollar hit lifetime lows versus the euro.
"The ongoing weakness in the dollar and fresh highs for oil
look set to entice further anti-recessionary/inflationary
hedging towards gold," TheBullionDesk.com said in a note."The
big question now is how much resistance lies ahead of $1,000."
FOREGONE CONCLUSION
Silver struck a 27-year high above $21 on strong speculative
buying, platinum traded below an historical peak and U.S. gold
futures held just near record highs around $995 an ounce.
"It's an investor-driven story, with the investor demand
coming from U.S. dollar weakness. I can't see the trend abating
anytime soon, with all the drivers of gold remaining in place,"
said Daniel Hynes, metals strategist at Merrill Lynch.
"Also inflation concerns seem to be rising on a daily basis
and that certainly bodes well for gold ... $1,000 is a foregone
conclusion now."
The dollar's decline has been exacerbated by weak U.S.
economic data and worries about a recession, which has
galvanised the U.S. Federal Reserve to cut borrowing costs
sharply to 3 percent, with further easing expected to come.
A weaker dollar makes gold cheaper for holders of other
currencies. Gold is also seen as a hedge against inflation.
Gold has also jumped in other currencies, which is often
seen as a bullish sign. The metal quoted in euros <XAUEUR=R> was
at 644 euros an ounce, below this week's record high of 649.85
euros. It <XAUGBP=R> was last at 489 sterling, versus Monday's
record of 497.55 sterling.
Platinum <XPT=> was down at $2,205/2,210 an ounce against
$2,240/2,247 in New York on Wednesday. It hit a record high of
$2,290 this week on supply concerns following power problems in
South Africa, the world's top producer.
Mines in South Africa, have been operating at 90 percent of
their usual power since late January after electricity shortages
forced the mining sector to shut down for five days.
Silver <XAG=> was at $20.45/20.50 late in New York. Spot
palladium <XPD=> fell more than 5 percent to below $520 and was
last at $521/526 an ounce from $552/556.
(Additional reporting by Pratima Desai)
(Editing by Michael Roddy)
