* Dollar recovers some lohst ground but stays under pressure
* Gold eyes further moves in currencies for next leg higher
* Barrick announces liquidation of hedge positions
(Updates throughout, changes dateline from TOKYO)
By Jan Harvey
LONDON, Sept 9 (Reuters) - Gold held near $1,000 per ounce
on Wednesday, supported by a weak dollar and concern about the
sustainability of this year's stunning rally in shares and some
key commodities with prices seen ahead of fundamentals.
An announcement from the world's largest gold miner, Barrick
Gold <ABX.TO>, that it plans to eliminate its forward gold sales
also lent a fresh prop to prices, analysts said.
Spot gold <XAU=> stood at $995.40 an ounce at 0937 GMT
compared with $995.20 late in New York on Tuesday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange eased $2.10 to $997.70 an
ounce.
Gold broke through the $1,000 mark for the first time since
February on Tuesday and rallied to an 18-month high, boosted by
technical buying momentum and a sharp slide in the dollar. The
U.S. currency clawed back some lost ground on Wednesday but
remained under pressure.
"Clearly part of this is concern about further weakness in
the dollar," said Daniel Smith, an analyst at Standard
Chartered. "People are piling into gold in all sorts of
different ways, both consumers and investors."
He said a more cautious tone to the wider markets, after a
rally in asset prices over the summer months, and expectations
China may move to diversify its foreign exchange holdings away
from the dollar were also lending support to the precious metal.
"Our view is that (gold) will keep pushing higher over the
next few weeks and towards the end of the year, and that it will
actually break through the previous high," he said.
Gold touched a record $1,030.80 an ounce in March 2008.
Analysts say that if prices manage to consolidate around $1,000
an ounce, rising risk aversion and dollar weakness could push
them back towards this high.
The dollar index <.DXY> was broadly flat early on Wednesday
near the year-lows it hit in the previous session, supporting
gold but lending little fresh direction. []
Questions over the dollar's status as a global reserve
currency fuelled selling of the U.S. unit on Tuesday. A weaker
dollar tends to prompt buying of gold as an alternative asset.
BARRICK CUTS HEDGES
Oil prices were steady, meanwhile, above $71 an ounce,
holding onto Tuesday's 4.5 percent dollar-driven gains. Gold
tends to track crude prices, as it can be used as a hedge
against oil-led inflation. []
Meanwhile Barrick Gold said it plans to eliminate its
outstanding fixed-price gold hedges and a proportion of its
floating hedges. []
Miners used to hedge by selling forward their unmined
production as a means to lock in prices. However, as prices have
risen in recent years, they have tended to de-hedge, or cut back
their hedged positions, to take advantage of price gains.
Commerzbank analyst Eugen Weinberg said Barrick's last major
bout of de-hedging in 2005 caused prices to jump. But analysts
said longer term the elimination of the global hedgebook could
prove negative for prices, as it removes a source of demand.
Among other precious metals, silver <XAG=> was at $16.33 an
ounce against $16.41. Silver, which like copper or nickel is a
largely industrial metal as well as an investment product, was
under pressure from losses in the base metals on Wednesday.
Elsewhere platinum <XPT=> was at $1,279 an ounce against
$1,283, while palladium <XPD=> was at $287 against $294.
Palladium prices are suffering from their proximity to the
key $300 an ounce mark, which has prompted some investors to
take profits after the metal's 1 percent rise in Tuesday.
"$300 is big psychological number, so naturally some selling
pressure will be around," said one London-based analyst. "More
attention is focused on platinum."
Investment in palladium exchange-traded funds has also been
firm. Holdings of ETF Securities' London palladium fund rose
63,000 ounces or 16 percent in the week to Monday.
(Reporting by Jan Harvey; Editing by Anthony Barker)
