(Updates with quotes, prices)
By Atul Prakash
LONDON, April 17 (Reuters) - Gold edged down after hitting a
three-week high above $950 an ounce on Thursday, as a slight
recovery in the dollar prompted profit-taking in the metal.
But record high oil prices have lifted gold's appeal as a
hedge against inflation and are seen underpinning the market.
Spot gold <XAU=> rose as high as $952.60 an ounce before
falling to $942.15/942.85 at 1432 GMT, against $943.90/944.70 in
New York late on Wednesday, when the metal gained 2 percent.
"The whole move up was more forex related than anything
else. But we also completed the 50 percent retracement level at
$952 and ran into some technical selling," said Simon Weeks,
managing director of precious metals at Bank of Nova Scotia.
"The market feels a little heavy at the moment. If we break
back below $940 then we are back into the old $900-$940 range,
but if we break above $952, we could well go back to $1,000."
The euro retreated from a record high against the dollar
after Eurogroup head Jean-Claude Juncker said excessive exchange
rate volatility was bad for global growth and called euro gains
against the dollar "undesirable".
Gold often moves in the opposite direction of the dollar, as
the metal is traditionally considered an alternative investment
and a safe-haven asset.
But the metal got support from oil, which set a record above
$115 a barrel as a fall in U.S. gasoline inventories raised
supply shortage concerns ahead of the summer driving season.
"Crude oil is still rising and that's supporting commodities
across the board," said Walter De Wet, precious metals analyst
at Standard Bank.
"If gold breaks the $950-$954 level, technically we might
see a rally higher. But for the metal to test much higher, we
need some increased risk aversion and that may come from some
really bad U.S. data or poor earnings results."
In other markets, U.S. gold futures for June delivery <GCM8>
rose $5.7 an ounce to $953.90.
Platinum <XPT=> rose as high as $2,063 an ounce and was last
quoted at $2,045/2,055, up from $2,015/2,025 in the U.S. market
late on Wednesday.
"The platinum story continues to remain favourable,
especially now that the spot price seems to be working its way
through the $2,040-$2,045 range resistance," Michael Jansen,
analyst at J.P. Morgan Securities, said in a note.
"We continue to believe that the power problems in South
Africa will hamstring both output from existing operations and
the efforts by miners to bring on new production. We continue to
see platinum working its way back towards the $2,200 level."
Silver <XAG=> climbed to a one-month high of $18.74 an ounce
before falling to $18.27/18.32, against $18.28/18.33 late on
Wednesday. Palladium <XPD=> was up $1 at $456/461 an ounce.
(Editing by Chris Johnson)
