* Gold retreats from 7-month high on technical selling
* SPDR Gold Trust holdings hit record-high 1,024.09 tonnes
* Bullion could test $1,000 in near term
By Risa Maeda
TOKYO, Feb 19 (Reuters) - Gold slid on Thursday, pausing
for breath after after earlier hitting a new seven-month high,
as bullion consolidated gains before a widely anticipated
challenge to a fresh peak near $1,000 on safe-haven buying.
Technically, the metal is overbought in the short term, but
another record in the holdings of the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
highlighted robust interest by investors.
Spot gold <XAU=> was trading at $976.60 an ounce at 0651
GMT, down 0.8 percent from New York's notional close on
Wednesday and poised to mark the biggest one-day percentage
loss since Feb. 9, when it lost 1.8 percent.
Earlier on Thursday, gold briefly rose as high as $985.95,
the highest level since July. It is now just 5 percent below
the all-time high of $1,030.80 touched in March, when record
oil and uncertainties in the dollar's outlook spurred buying.
But traders said bullion's retreat was temporary as a
growing chorus of investors are betting on a rally to and above
the psychologically important $1,000 mark.
"The next target is $1,030, having cleared the high set in
October of $930," said Naomi Suzuki, an analyst at SCM
Securities in Tokyo.
"Gold is a relative choice. It is benefiting from
instability in the global economy, fears of super inflation in
the coming years and investor aversion from more complicated,
riskier assets, like hedge funds," Suzuki said.
UBS said earlier this week that global assets of hedge
funds may drop to $1.2 trillion by the end of the first
quarter, down more than 35 percent from a peak in mid-2008, as
the number of managers declines and funds rely less on
strategies that use leverage. []
In contrast, the holdings of the SPDR Gold Trust hit a
record 1,024.09 tonnes as of Feb. 18, up almost 250 tonnes in
the year to date and compared with 780 tonnes in the previous
four years since its listing in Nov. 2004. []
Last year, China's demand for gold for investment nearly
tripled to 68.9 tonnes, World Gold Council data showed, and a
WGC official said demand from the world's No. 2 gold consumer
after India would remain robust this year. []
The dollar's recent rally to a six-week high against the
yen and a three-month peak versus the euro has had little
impact on gold, and neither did the greenback's retreat on
Thursday. []
The precious metal appears to have lost its traditional
negative correlation to the dollar in the past few months. It
is benefiting from long-term inflation worries with many
countries
printing money to stimulate their sluggish economies and
central banks loosening credit, analysts said.
The Bank of Japan on Thursday left its key policy rate
unchanged at 0.10 percent, as expected, but extended the
deadline for its buying of commercial paper to help corporate
funding as it battles the credit crunch. []
U.S. gold futures for April delivery <GCJ9> stood at
$979.0
an ounce in electronic trade, up 0.1 percent from the previous
close on the COMEX division of the New York Mercantile
Exchange.
Precious metal prices at 0702 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 977.10 -7.40 -0.75 17.34
Spot Silver 14.32 0.01 +0.07 -3.05
Spot Platinum 1080.00 -17.50 -1.59 -28.95
Spot Palladium 216.50 -0.50 -0.23 -41.17
TOCOM Gold 2950.00 58.00 +2.01 -3.59
62340
TOCOM Platinum 3245.00 -39.00 -1.19 -39.22
15431
TOCOM Silver 427.00 7.90 +1.88 -21.07
582
TOCOM Palladium 657.00 7.00 +1.08 -51.37
584
Euro/Dollar 1.2577
Dollar/Yen 93.58
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 Miho Yoshikawa; Editing by Ben Tan)
