Gold edged down on Friday as speculators booked profits after prices rallied more than 2% the previous day, but buying interest from investors remained strong, with ETF holdings hitting another record.
Platinum dropped more than 1% on fears of falling demand after Ford reported a record loss, while silver rallied to its strongest in four months before slipping to track weaker gold.
Gold was trading at $US903.00 an ounce, down $US3.75 from New York's notional close on Thursday, when it jumped more than 2% after US stocks tumbled on fears of a worsening recession. Gold was within sight of a three-month high of $US915.30 hit on Monday.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said it held a record 843.59 tonnes of gold as of January 29, up 10.71 tonnes from January 27, reflecting flight-to-quality buying amid chaos in the financial sector.
Volatile stock and currency markets prompted the funds to shift their money back into gold for better returns, said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
"The next target is of course $US1000,'' said Sonoda, referring to a level last seen in March, when gold struck a record $US1030.80 on fund buying driven by fears of rising energy costs and uncertainties in the dollar's outlook.
"Silver is also very interesting. Actual buying is a good support for the price,'' said Sonoda, adding that the white metal also benefited from investment buying.
Industrial precious metal silver's appeal as a refuge for investors worried about financial instability will help it perform better than its rivals platinum and palladium, a Reuters survey showed.
"I guess the market is very quiet in Asia, with people in China still on holiday. The funds have been buying and that's why we seen an increase on the ETF, but they are also keen to book profits,'' said a dealer in Hong Kong.
