* Strong investment buying, institutional demand support
* Gold hits new highs in euro, sterling, rupee and others
* GLD, iShares Silver ETFs hit fresh holding records
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 19 (Reuters) - Gold bounced from early
session lows but still ended weaker on profit taking amid fears
the metal's recent sharp rally had been overdone, but
safe-haven buying and growing investment interest in gold
should provide underlying support, traders said.
The precious metal is still expected to push towards highs
above $1,000 an ounce, dealers said, as fears over the outlook
for the financial system boosts investment.
Bullion reached new record highs when priced in a range of
currencies on Thursday, including sterling, the euro, the
Australian and Canadian dollars and the Indian rupee.
Spot gold <XAU=> was at $973.40 at 2:28 p.m. EST (1928
GMT), 1.1 percent lower than Wednesday's close of $984.50 late
in New York. Earlier it touched a peak of $985.95 an ounce, its
loftiest price since July 15.
U.S. gold for April delivery <GCJ9> settled down $1.70 at
$976.50 an ounce on the COMEX division of the New York
Mercantile Exchange.
"The (gold) exchange-traded fund markets, particularly GLD,
is attracting a lot of new buyers, and a lot of institutional
buyers who were not heavy buyers in the past," said Robert
Lutts, chief investment officer of Cabot Money Management,
which manages $400 million of client assets.
Holdings of the world's largest gold-backed ETF, the SPDR
Gold Trust <GLD.P>, commonly known as GLD, rose 1.5 percent to
a record 1,024.09 tonnes as of Wednesday. []
Landesbank Baden-Wurttemberg analyst Thorsten Proettel said
heavy investment in gold-backed ETFs such as the GLD had left
the market looking overbought.
Gold has climbed nearly 5 percent this week at its Thursday
peak as fears over the outlook for the financial system and
rising inflation in the longer term prompted investors to buy
it as a safe store of value.
INFLOWS INTO EFTS
Investment demand for apparently safer assets is still
supporting bullion.
"Over the past month, inflows into the ETF have more than
equaled mine supply ... and are close to matching our estimates
of total demand for gold," UBS strategist John Reade said in a
research note.
In supply news, the world's second-largest gold producer,
Newmont Mining <NEM.N>, sees equity gold sales at 5.2 million
to 5.5 million ounces in 2009, and reported adjusted earnings
per share of 26 cents in the fourth quarter. []
Among other precious metals, spot silver <XAG=> at $13.93
an ounce, down 2.7 percent from its Wednesday finish of $14.32.
Earlier, it peaked at $14.38, its strongest level since
mid-August.
Investment in silver ETFs has also been strong. Holdings of
the world's largest, the iShares Silver Trust <SLV.P>, jumped
more than 214 tonnes on Wednesday. []
Spot platinum <XPT=> was at $1,062.00 an ounce, down 3.2
percent from its previous close of $1,097.50, while spot
palladium <XPD=> was at $214, down 1.4 percent from its late
Wednesday New York quote of $217.
Both platinum and palladium have dipped in the last year as
demand from carmakers, major users of the metals, has slumped.
(Editing by Christian Wiessner)
