LONDON, Dec 18 - Gold was modestly softer in Europe on Thursday morning after notching up fresh near eight-year peaks in Asian trade on the back of further dollar weakness, while platinum strode to yet another 23-year peak before backtracking. Gold peaked at $413 -- just $4 away from its 1996 peak at $417.70 an ounce -- and platinum hit a high of $858 an ounce, the 10th time it has done so in the past 12 sessions. "It (gold) had been a bit disappointing this week when you consider the euro was hitting lifetime highs virtually every day, but today it finally broke through," Kamal Naqvi, precious metals analyst with Barclays Capital, said. Spot gold was quoted at $410.50/411.25 a troy ounce by 1111 GMT, down from New York's close on Wednesday at $411.75/412.50.
Naqvi said the metal really needed to establish itself above $410 in order to prepare an attack on the 1996 highs. Andreas Maag of UBS Investment Bank said in a report that gold was in no hurry and taking its ascent step by step. "Only a dollar correction would changed the current track," he said. Dollar weakness has been instrumental in gold's rally this year, with a 19 percent rise in the euro versus the greenback matched by a corresponding 19 percent increase in bullion prices. The dollar was holding near recent record lows versus the euro on Thursday on a growing view the European Central Bank may tolerate further gains in the single currency. By 1049 GMT, the euro was trading at $1.2420/25, just off a new high scored earlier at $1.2436. Despite gold's latest gains some analysts were keeping a close eye on gold equities, which have fallen prey to profit taking that has not so far been reflected fully in the bullion price. Although there is not always a close link between the two assets, movements in gold stocks can often precede moves in gold bullion prices. "One warning signal might be the poor performance of gold equities, although they closed reasonably yesterday, they have been weakening over the past few days," Naqvi said.
PLATINUM BUOYANT
Platinum sailed to new highs before a bout of profit taking ate into the gains, but further gains were not ruled out after having already risen $55 from its low at the end of last week. "Some profit taking before the end of the year would seem extremely logical, but traders are extremely wary at present to go against the trend," Naqvi said. Prices have increased by nearly 45 percent this year as speculators have bought on the back of supply shortages. The metal is used mainly in jewellery and in auto-catalysts to clean exhaust fumes. Spot platinum was quoted at $840.00/845.00 from $841.50/846.00. Silver also put in a strong performance, scoring its highest in 4-1/4 years above $4.70. Spot was indicated at $5.71/5.73, up from New York's $5.66/5.68. Silver peaked at $5.93 in 1999. Some dealers were looking for the metal to now target $5.80, although analysts were less optimistic and noted there remained little fundamental reason for silver to be up at these levels. They attributed the gains more to silver following the firmer tone in gold and the base metals complex this week, rather than to any individual interest in silver itself. Palladium was stuck in the doldrums, ticking up to $200.00/205.00 from $196.50/202.50. //