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* Futures hit $1,000, spot gold hits 6-month highs
* Investors turn to gold as refuge from economic fears
* Historically elevated levels seen as source of caution
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Chikako Mogi
TOKYO, Sept 8 (Reuters) - U.S. gold futures hit a six-month
high of $1,000 and spot gold also rose to six-month high on
Tuesday as the dollar's weakness, concerns about the
sustainability of the global economic recovery and worries
about inflation underpinned sentiment.
Some market players were cautious about prices sustaining
$1,000, however, saying the rally had been driven by
speculators and gold was an expensive buy in historical terms.
Futures have topped $1,000 nine times -- three times this
year and six last year, including a record $1,033.90. Spot
prices have risen above $1,000 just four times - once in
February and three times in March 2008, when they hit a record
$1,030.80.
"Futures were always going to lead the way above $1,000, so
spot can't be far behind. Gold's rising price is due to
uncertainty all the way from personal investors right through
to institutions," said Sandra Close, an analyst for gold
research group Surbiton Associates.
"There are questions out there over the health of
economies, where interest rates are going. All that encourages
gold hoarding. There's potential to see the price go even
higher," she said.
Spot gold <XAU=> rose as high as $997.90, its highest since
February, when it briefly topped $1,000, before easing to
$994.80. New York's notional close was $993.85.
U.S. gold futures for December delivery <GCZ9> touched
$1,000 briefly before slipping to $996.3 per ounce. Futures
settled at $996.70 on Friday. U.S. markets were closed on
Monday for the Labor Day holiday.
ARE HIGH LEVELS SUSTAINABLE?
Despite gold hitting $1,000, it is far from an
inflation-adjusted record, which analysts at GFMS have put as
high as $2,079 per ounce.
Some analysts have said the higher gold price reflects
uncertainty across markets about how central banks will
untangle themselves from fiscal stimulus aimed at reviving
economic growth, as well as dollar weakness.
The Group of 20 finance ministers and central bankers said
at the weekend they would not remove economic stimulus until
the global recovery was well entrenched. []
Others said buying momentum could wane to push prices back
towards $950 before consolidating, given weak physical demand
and a tendency by big Asian consumers to sell when prices rise.
"I don't know if it will stay there for a particularly long
(period). My view is that by the end of the year the gold price
will be lower, probably down to around $950 an ounce," said
David Moore, a commodities strategist at Commonwealth Bank of
Australia.
A confluence of dollar weakness -- making the metal more
attractive to non-U.S. investors -- and doubt about the
sustainability of global economic recovery have prompted a
spate of investors to seek refuge in gold.
The dollar held around 93 yen <JPY=>, although it was
slightly lower on a basket of currencies <=USD> in early trade.
The dollar index <.DXY> is resting on trendline support at
78.00 and a sustained break lower would be quite bearish
technically.
Along with currencies, analysts were watching stock markets
to gauge gold's direction. A sell-off in equities on concerns
about the economy could boost gold's safe-haven appeal.
"The gold market has legged up into a new range, but we
need to see it sustain at $1,000 for a few days to write a new
long-term story," said Mark Pervan, a senior commodities
analyst at ANZ Bank.
"Gold bulls are easily spooked around these numbers and
need to see them sustained to bolster confidence. Gold is
rallying on fears of an equity retreat. The risk is that stocks
will fall and people are hedging that by buying gold," he said.
Asian stocks were up marginally on Tuesday.
Traders said volume was not large and as futures slipped
soon after hitting the key level, and with spot struggling to
extend gains towards $1,000, prices might languish during Asian
trade.
"I think these high levels could trigger selling ... and it
might be difficult for gold to sustain the $1,000 level," said
Shuji Sugata, a manager at Mitsubishi Corp Futures & Securities
in Tokyo.
Investment flows took a break, with the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
saying holdings stood at 1,077.63 tonnes as of Sept. 7,
unchanged from Friday. []
The dollar steadied after falling the previous day as the
weekend meeting of G20 finance chiefs boosted investor appetite
for growth-related "riskier" assets like commodities and
stocks. [] <FXNEWS> PRICES
Precious metals prices at 0200 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 994.60 0.75 +0.08 13.00
Spot Silver 16.35 0.06 +0.37 44.43
Spot Platinum 1259.00 4.00 +0.32 35.09
Spot Palladium 291.50 0.00 +0.00 57.99
TOCOM Gold 2977.00 -6.00 -0.20 15.70
25762
TOCOM Platinum 3760.00 -15.00 -0.40 41.78
5112
TOCOM Silver 487.20 1.60 +0.33 52.58
256
TOCOM Palladium 874.00 -9.00 -1.02 58.91
404
Euro/Dollar 1.4332
Dollar/Yen 92.73 TOCOM prices in yen per gram, except
TOCOM silver which is priced in yen per 10 grams. Spot prices
in $ per ounce.
(Additional reporting by Jim Regan, Miho Yoshikawa and Lewa
Pardomuan; Editing by Sambit Mohanty)
