(Recasts, adds quotes, changes prices, dateline, pvs SINGAPORE)
By Atul Prakash
LONDON, March 5 (Reuters) - Gold steadied on Wednesday after
trimming gains as the dollar gained ground against the euro, but
analysts said the long-term bull trend remained intact and the
metal still had $1,000 an ounce in its sights.
Spot gold <XAU=> rose as high as $968.50 an ounce on bargain
hunting before falling to $963.10/963.80 at 1107 GMT, against
$963.20/964.00 in New York late on Tuesday, when it fell nearly
2 percent with a decline in oil prices.
Though gold remained below Monday's record high of $989.30,
analysts said it was still on track to hit $1,000, with oil
prices hovering near an all-time high and the dollar's appeal
declining on expectations of more U.S. rate cuts.
"The next move in gold really depends on what happens to the
U.S. non-farm payrolls data. If it's much weaker than expected,
the dollar would probably weaken and it would be definitely good
for gold," said Walter De Wet, analyst at Standard Bank.
"Longer term, gold is going to go up. The $1,000 level is a
strong resistance level and the metal might make one or two
attempts before it breaks it," he said.
The dollar gained ground against the euro and a basket of
currencies, but was still close to record lows ahead of data
that could derail sentiment about the world's biggest economy.
Weak readings from the Institute for Supply Management's
index of service sector activity due later in the day and U.S.
non-farm payrolls on Friday, would bolster the case for more
sharp interest rate cuts to help stabilise the U.S. economy.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil steadied above $100 a barrel as OPEC ministers indicated
they were likely to keep output unchanged despite U.S. calls for
action to cut prices. It hit a record high of $103.95 on Monday.
"Short-term though, gold is still vulnerable to profit
taking," said James Moore, metals analyst at TheBullionDesk.com.
"Bargain-hunting support has been found this morning and
given the still negative outlook for both the U.S. economy and
the greenback, it does seem inevitable that gold will challenge
$1,000 in the near future."
JEWELLERS ACTIVE
In the physical sector, gold's fall from record highs
spurred buying by jewellers in Asia, while the marriage season
in India, the world's largest bullion consumer, helped the local
market. []
U.S. gold futures for April delivery <GCJ8> was down $1.1 at
$965.30 an ounce, off a record high of $992.00 on Monday.
Platinum <XPT=> rose as high as $2,239 before falling to
$2,191/2,201 an ounce, against $2,220/2,230 late on Tuesday,
when it hit a record of $2,290 on persistent supply fears after
a power crisis disrupted mining in top producer South Africa.
"Ongoing supply issues and potential for further mine
disruption in South Africa means that platinum prices could see
some immunity to more general market weakness," Fairfax
investment bank said in a daily market note.
A crippling power crisis forced a shutdown of the crucial
mining sector for five days in January and since then mines have
been operating with only 90 percent of their usual power,
raising fears of massive job losses in the industry.
South Africa power utility Eskom said applications for new
power connections for construction projects requiring more than
100 kilo volt-ampere would take up to six months to approve.
Palladium <XPD=> fell to $536/546 an ounce from $545/550,
having reached a 6-1/2-year high of $590 on Tuesday. Silver
<XAG=> edged down to $19.60/19.65 an ounce from $19.71/19.76 --
off Monday's 27-year high at $20.60 an ounce.
(Reporting by Atul Prakash; editing by Chris Johnson)
