(Recasts, updates with New York closing prices, market
activity; adds second byline, dateline, previously LONDON)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, Jan 9 (Reuters) - Gold dipped late on
Wednesday, finishing lower as profit-taking, a recovering
dollar and slipping oil prices took a toll on the precious
metal that surged earlier to a record high just under $900.
Gold jumped early in the volatile session amid heavy
investor buying, firm oil and a strong debut for Shanghai gold
futures. Platinum finished up but pared gains after hitting
lifetime highs.
Spot gold <XAU=> prices jumped as high as $891.40 an ounce
and fell as low as $871.60. It was quoted at $877.70/878.50 by
New York's last quote at 2:15 p.m. EST (1915 GMT), against
$878.10/878.90 in New York late on Tuesday.
U.S. gold futures for February delivery at the COMEX
division of the New York Mercantile Exchange <GCG8> finished up
$1.40 at $881.70 an ounce, after surging to as high as $894.40
in electronic trade overnight.
"These sell-offs are just temporary, giving people some
breathing space. Every so often there is some profit-taking,
but gold is bought on every dip," said Peter Hillyard, head of
metals sales at ANZ Investment Bank.
"We are in a bull market and it's not over yet. The funds
are piling in and the market is expecting gold to move through
$900 quite soon, probably within a week. You are going to see
gold make its way to $1,000 over the next six months," he
said.
Spot gold rose more than 30 percent in 2007, its biggest
annual gain since 1979. Some analysts said a slowing U.S.
economy could put a damper on gold's rally.
"We have a lot of momentum in the market. But I am pretty
cautious about how far you can ultimately go. I am still
focusing on the deteriorating economic growth, and the fact
that the dollar recently has started a new uptrend," said
Patrick Fearon, precious metals analyst with A.G. Edwards &
Sons in St. Louis.
SHANGHAI GOLD
Gold surged overnight after the key Japanese gold futures
price <0#JAU:> hit its highest level since March 1984 and gold
futures were launched on the Shanghai exchange.
The contract <0#SHAU:> surged to nearly $1,000 an ounce on
Wednesday, as enthusiastic new bullion bulls bid a hefty
premium over their global peers. []
"The launch of the Shanghai gold futures contract seems
likely to be the trigger for gold to hit our one-month target
of $900/oz, probably before the end of the week," UBS
Investment Bank said in a daily client note.
"It looks like the gold market wants to see and test the
$900 level. I could imagine that there will be some long
liquidation by then at the latest," said Alexander Zumpfe, a
metals trader at Germany's Heraeus.
But investors found reasons to sell gold as the session
wore on. Goldman Sachs said it expected the U.S. economy to
drop into recession this year. The dollar rebounded as dour
German industrial output and retail data sparked concern about
a potential euro zone slowdown. [] Oil eased below
$96 a barrel after rising on Tuesday. []
Platinum <XPT=> rose as high as $1,560 an ounce and was
last quoted at $1,550/1,554, versus $1,547/$1,552 late in New
York.
Palladium <XPD=> fell $3 to $373/377 an ounce, while silver
<XAG=> rose to 2-month high of $16.14 an ounce before falling
to $15.67/15.72, against its previous finish of $15.70/15.75 in
New York.
(Additional reporting Chikafumi Hodo in Tokyo)
