* Dollar cuts initial losses, pressures gold
* Platinum ends lower, retreating from 12-month high
* Barrick announces liquidation of hedge positions
(Recasts, updates prices, market activity, adds second
byline, dateline, previous LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Sept 9 (Reuters) - Gold ended lower on
Wednesday after briefly topping $1,000 an ounce earlier in the
session, but worries about the dollar's gradual deterioration
amid growing risk appetite should continue to boost bullion's
appeal.
An announcement by the world's largest gold miner Barrick
Gold <ABX.TO><ABX.N> that it plans to eliminate its forward
gold sales also underpinned prices, analysts said.
U.S. December gold futures <GCZ9> settled down $2.70 at
$997.10 an ounce on the COMEX division of the New York
Mercantile Exchange.
Spot gold <XAU=> at $988.75 an ounce at 2:21 p.m. EDT (1821
GMT), compared with $995.20 late in New York on Tuesday.
Platinum <XPT=> also climbed to a 12-month high of $1,295
an ounce in early trade, boosted by the initial gains in gold
prices and economic optimism. It was later at $1,275 an ounce
against $1,283.
"There is strong investment interest at the moment, and the
media interest after gold broke through $1,000 an ounce is also
increasing interest on the speculative side," said Commerzbank
analyst Eugen Weinberg.
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 precious metal 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 toward this high.
On Wednesday, the dollar fell to a near one-year low
against a basket of major currencies, extending a sharp decline
from the previous day, as higher global equities spurred
investors to move into riskier currency trades. [].
Questions over the dollar's status as a global reserve
currency fueled selling of the U.S. unit on Tuesday. A weaker
dollar tends to prompt buying of gold as an alternative asset.
In late sessions on Wednesday, however, the dollar trimmed
initial losses, and that put pressure on gold.
CAUTION REIGNS
Daniel Smith, an analyst at Standard Chartered, said that a
more cautious tone to the wider markets followed by 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," Smith said.
James Steel, chief commodities analyst at HSBC in New York,
said in a note that the likely response to gold at $1,000 an
ounce would be for the recycled scrap market to increase and
jewelry demand to contract, and that might undermine gold's
rally.
Barrick Gold said it planned to eliminate its outstanding
fixed-price gold hedges and a proportion of its floating
hedges. []
Miners have hedged by selling forward their unmined
production as a means to lock in prices. But 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.
Among other precious metals, silver <XAG=> was at $16.29 an
ounce against $16.41. Silver, which like copper or nickel is a
largely industrial metal as well as an investment product, came
under pressure from losses in the base metals early Wednesday.
Palladium <XPD=> was at $290 against its previous finish of
$294.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCZ9> 997.10 -2.70 -0.3 884.30 12.8
US silver <SIZ9> 16.470 -0.040 -0.2 11.295 45.8
US platinum <PLV9> 1291.40 1.80 0.1 941.50 37.2
US palladium <PAZ9> 295.05 -3.55 -1.2 188.70 56.4
Prices at 2:35 p.m. EDT (1835 GMT)
Gold <XAU=> 990.85 -4.35 -0.4 878.200 12.8
Silver <XAG=> 16.31 -0.10 -0.6 11.30 44.3
Platinum <XPT=> 1274.00 -9.00 -0.7 924.50 37.8
Palladium <XPD=> 290.00 -4.00 -1.4 184.50 57.2
Gold Fix <XAUFIX=> 999.50 -1.25 -0.1 836.50 19.5
Silver Fix <XAGFIX=> 16.240 -0.510 -3.0 14.760 10.0
Platinum Fix <XPTFIX=> 1286.00 0.00 0.0 1529.00 -15.9
Palladium Fix <XPDFIX=> 294.50 0.00 0.0 365.00 -19.3
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
