* Gold expected to make new assault on $1,000/OZ
* Inflation fears recede
* Silver hits three-week low, down more than 5 pct
(Updates prices, adds comment)
By Pratima Desai and Rebekah Curtis
LONDON, Feb 26 (Reuters) - Gold slid in choppy trade on
Thursday to its lowest in nearly two weeks, but analysts said
the retreat could prompt further buying by investors seeking a
safe place to park their assets.
Spot gold <XAU=> fell to $930.80 an ounce, the lowest since
Feb. 11. It was $935.60/937.60 an ounce at 1608 GMT compared
with $952.10 late in New York on Wednesday and an 11-month high
above $1,000 last week.
"It's had such a strong run, it seems to have run out of
steam," Fairfax analyst Marc Elliott said.
Investors have been piling into gold since last October as
the financial crisis escalated after the collapse of Lehman
Brothers.
Fears that the massive amounts of money being pumped into
the global economy by central banks and governments will
eventually result in spiralling inflation have been another
reason for investors to buy gold.
However, analysts say demand may remain subdued for a while
after U.S. Federal Reserve Chairman Ben Bernanke said he had a
strategy to keep inflation under control as the economy
recovers. []
"Gold will go up when there are uncertainties around, (but)
when banking pressures ease then you'll probably see gold
drifting back again," a trader said.
The precious metal came under further pressure in afternoon
trade as stock markets recovered. [] []
MOMENTUM NEEDED
Last Friday gold's high of $1,005.40 an ounce was not far
from the record high of $1,030.80 an ounce hit last March.
Prices have been boosted by buying for exchange traded
gold-backed funds (ETFs), the biggest of which is the SPDR Gold
Trust <GLD>. SPDR's holdings hit a record above 1,028 tonnes
last week, but since then have remain unchanged.
"We've seen the flows into physically backed ETFs come to a
standstill over the past few sessions, and in turn prices are
easing as they are not able to draw the same support from
investment demand," Barclays Capital analyst Suki Cooper said.
"The external environment at the moment isn't entirely
positive for gold. We've seen the dollar strengthening as well."
Analysts said a generally firmer dollar against the euro
<EUR=> will also weigh on precious metals market sentiment in
Europe, as a higher U.S. currency makes metals priced in dollars
more expensive for holders of other currencies. []
Spot silver <XAG=> fell more than 5 percent to a three-week
low of $12.97 an ounce. It was last at $13.11/13.17 from $13.69.
"In terms of silver...Industrial demand, jewellery, and
photography demand all look very weak," Cooper added.
Platinum <XPT=>, also a precious industrial metal, was at
$1,043.50/1,053.50 an ounce from $1,044 on Wednesday. The metal
used in autocatalysts to clean car emissions has been battered
alongside auto sales.
Palladium <XPD=> was at $193.50/197.50 from $195.50.
(Editing by Sue Thomas)
