Gold retreats from record high as oil prices soften

By Atul Prakash

LONDON (Reuters) - Gold retreated from record highs on Thursday as oil prices slipped, but the precious metal held within striking distance of $1,000 a troy ounce as the dollar struck an all-time low against the euro.

Spot gold jumped as high as $991.90 an ounce and was quoted at $984.40/985.70 at 1603 GMT, up from an earlier low of $959.45, but below the $985.70/986.50 late on Wednesday.

Traders said crude oil prices nearly $2 below the record high of $105.97 a barrel set earlier on Thursday and some profit-taking in thin markets were behind the fall in prices.

"Guess some speculators just got cold feet, maybe after the news that power deliveries to mines in South Africa are going to be raised to 95 percent," said Wolfgang Wrzesniok-Rossbach, head of marketing at precious metals group Heraeus.

South Africa said it will let mines increase power consumption from 90 to 95 percent of normal because the country's power crisis has stabilized.

Analysts still expect gold to break through the $1,000 level, but think it may take several forays.

Gold has gained nearly 20 percent in 2008 as funds, speculators and investors poured money into precious metals on expectation of further interest rate cuts in the United States and record-high oil, which lift its safe-haven appeal.

The dollar hit lifetime lows versus the euro.