(Updates prices)
By Lewa Pardomuan
SINGAPORE, March 14 (Reuters) - Spot gold steadied on
Friday and held within sight of the $1,000-an-ounce barrier
broken on the futures market after the dollar hit a record low
against the euro, boosting the metal's appeal as an alternative
investment.
Gold has gained nearly 20 percent in 2008, driven by buying
from investors and speculators on expectations of further
interest rate cuts in the United States and record high oil
prices, which raised its appeal as an alternative investment.
Spot gold <XAU=> rose to $993.80/994.60 an ounce from
$991.00/991.80 late in New York. It had powered to another
record high of $999.90 an ounce on Thursday.
Platinum and palladium held below their recent highs, while
silver tracked firm bullion.
"Providing oil prices maintain a dizzy height and the U.S.
continues to suffer, it looks extremely likely that gold will
test the $1,000 level and likely break through it," said Darren
Heathcote of Investec Australia in Sydney.
"But it may see some profit-taking as we get there, which
may hold its rise initially before possibly progressing on to
$1,004 to $1,005 an ounce," said Heathcote, who expected gold
to hit $1,000 later on Friday.
Gold futures for April delivery <GCJ8> on the COMEX
division of the New York Mercantile Exchange added $1.7 an
ounce to $995.5 an ounce, having struck a record $1,001.50 on
Thursday.
Gold hit $850 an ounce in January 1980 as high inflation
linked to strong oil prices, plus the Soviet intervention in
Afghanistan and the impact of the Iranian revolution, prompted
investors to buy the metal.
After adjusting for inflation, the 1980 high is equivalent
to $2,119.30 an ounce at 2007 prices, according to precious
metals consultancy GFMS Ltd.
In the physical sector, dealers saw sales of scrap as
jewellers and investors cashed in on gold's rise.
"There's of course some profit-taking but I guess people
are also cautious about what's going to happen after the price
hits $1,000. Some people are talking about gold hitting $1,100
and $1,200 in the middle of this year," said a dealer in Hong
Kong.
The dollar steadied around $1.5615 <EUR=> against the euro
after tumbling to an all-time low of $1.5646 in late New York.
Oil <CLc1> dropped on profit-taking after hitting a record $111
a barrel on Thursday.
"If the dollar continues to weaken, then, rather like the
price of oil, it'll be a long time before we see lower gold
prices," said Angus Campbell, head of sales at Capital Spreads,
in a note.
"Momentum is also being provided by many investors running
to gold as a safe haven in the face of credit woes and high
inflation."
Spot platinum <XPT=> fell to $2,085/2,095 an ounce from
$2,098/2,108 an ounce. Palladium <XPD=> eased to $503/508 an
ounce from $508/513 an ounce.
Silver <XAG=> edged up to $20.56/20.61 an ounce from
$20.42/20.47 an ounce.
Precious metals prices at 0248 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 993.80 -1.10 -0.11 19.35
Spot Silver 20.53 -0.01 -0.05 39.00
Spot Platinum 2083.00 -15.00 -0.71 37.04
Spot Palladium 503.00 -5.00 -0.98 36.68
TOCOM Gold 3244.00 42.00 +1.31 6.01
25992
TOCOM Platinum 6604.00 36.00 +0.55 23.69
6237
TOCOM Silver 671.00 9.10 +1.37 24.03
684
TOCOM Palladium 1691.00 15.00 +0.89 25.17
1970
Euro/Dollar 1.5605
Dollar/Yen 100.58
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Nick Trevethan; Editing by Alex
Richardson)
