* Dollar index slides to 14-mth lows, boosting gold
* Analysts warn precious metals in overbought territory
* Silver, platinum, rhodium hit highest in over a year
(Recasts, updates comments, closing prices, market activity,
adds second byline, dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Oct 14 (Reuters) - Gold eased slightly on
Wednesday, ending well off a record high set early in the
session based on dollar weakness, as the market consolidated
gains after a sharp rally that lifted prices to uncharted
territory.
Analysts are concerned that the metal may have become
overbought after prices rallied more than 6 percent in the last
month, peaking at $1,070.40 an ounce on Wednesday.
"The rally is a little exhausted for now. A lot of people
are already in it, so it's very hard to generate new buying at
such high levels," said Mihir Dange, a COMEX gold floor trader
in New York.
A Wall Street rally also diverted investment funds into the
equities sector and away from commodities.
Spot gold <XAU=> was at $1,062.90 an ounce at 2:14 p.m. EDT
(1814 GMT), against $1,063.35 late in New York on Tuesday.
U.S. December gold futures <GCZ9> settled down 30 cents at
$1,064.70 an ounce in choppy trade in the COMEX division of the
New York Mercantile Exchange.
For a graphic showing precious metals' relative price
performance in 2009, click here:
http://graphics.thomsonreuters.com/109/CMD_MTLSP1009.gif
"We basically have a situation here where all the precious
metals -- gold, silver, platinum and palladium -- are in
overbought territory, which is a little bit worrying in the
near term," said Ole Hansen, senior manager at Saxo Bank.
"In order for this move to continue, we need to test (its)
strength," he added. "But as long as (traders) keep selling the
dollar, there is no reason not to continue buying gold."
The dollar index <.DXY>, which tracks the currency's
performance against a basket of six others, hit its lowest
since August 2008 as traders bet on U.S. interest rates staying
low, with rising commodities denting its safe-haven appeal.
Meanwhile, oil prices extended gains on Wednesday to set a
2009 high of $75.40 a barrel, boosted by a weak dollar and
optimism over a global economic rebound. []
The Reuters-Jeffries CRB index <.CRB>, seen as a global
commodities benchmark, rose to an eleven-month high as oil,
base and precious metals prices rallied.
OVERBOUGHT TERRITORY
But demand for physical gold is still lackluster in key
markets as prices hold near record levels. In India, the
world's biggest bullion consumer last year, demand was slack
despite the onset of the festival period as prices rose.
Among other precious metals, platinum, silver and rhodium
also hit their highest levels in more than a year on Wednesday.
Platinum <XPT=> touched a 13-month peak of $1,362.50 an ounce
in Asian trade, and was last at $1,357.50 against $1,358.50 an
ounce late in New York on Tuesday.
Silver <XAG=> hit a 14-month high of $18.07 an ounce, and
was later at $17.86 versus $17.75. The world's main primary
silver producer Fresnillo <FRES.L> said it sees silver near
$17-18 an ounce for the rest of 2009. []
Autocatalyst material rhodium <RHOD-LON> rose $25 an ounce
to a year-high of $1,725, while palladium <XPD=> was last at
$326 versus $325.50. It hit a 14-month high of $333 on
Tuesday.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1064.70 -0.3 0.0 884.3 20.4
US silver <SIZ9> 17.908 0.068 0.4 11.295 58.5
US platinum <PLF0> 1366.60 5.90 0.4 941.50 45.2
US palladium <PAZ9> 330.80 1.00 0.3 188.70 75.3
Prices at 2:14 p.m. EDT (1814 GMT)
Gold <XAU=> 1062.90 -0.45 0.0 878.20 21.0
Silver <XAG=> 17.86 0.11 0.6 11.30 58.1
Platinum <XPT=> 1354.00 -4.50 -0.3 924.50 46.5
Palladium <XPD=> 326.50 1.000 0.3 184.50 77.0
Gold Fix <XAUFIX=> 1059.50 -6.50 -0.6 836.50 26.7
Silver Fix <XAGFIX=> 17.93 -6.00 -0.3 14.76 21.5
Platinum Fix <XPTFIX=> 1356.00 2.00 0.1 1529 -11.3
Palladium Fix<XPDFIX=> 326.00 3.00 0.9 365.0 -10.7
(Additional reporting by Jane Grieve in London; Editing by
Christian Wiessner)
