Gold rose more than 1 percent on Thursday, as the dollar trims gains against the euro while bargain hunting on the back of a weak U.S. currency sent platinum and palladium to multi-month highs. Spot gold rose to $942.35 per ounce at 9:15 a.m. EDT, up from $933.15 an ounce late in New York on Wednesday. Platinum marched to its highest in six months, lifting sister metal palladium nearly 6 percent to a 4-1/2 high. "A lot of the market movements focus on the euro/dollar," said Manqoba Madinane, an analyst at Standard Bank in Johannesburg. "That's the main factor driving the market and euro's going higher." The dollar edged down against a basket of major currencies .DXY and fell against the euro to 1.3619 from 1.3575. Gold is often viewed as an alternative asset to the dollar, rising when the greenback falls. A weaker dollar also makes gold less expensive for holders of other currencies. Bullion is 7 percent off the 11-month high above $1,000 set in February, and way below an all-time peak of $1,030.80 hit in March 2008. Madinane said gold would continue to march toward its record high but the trend would take time as physical buying runs out of steam and the high level of scrap material keeps a lid on the market. "I think in the short term $960 an ounce will be a resistance level but bullion will continue to target $1,000 an ounce," he said. LOSING PACE The U.S. economy contracted slightly more than previously estimated in the fourth quarter, pulled down by falling consumer spending and exports, while corporate profits plunged by the biggest margin since 1994. The gloomy state of the world economy has boosted the investment appetite for gold, which has since the start of the year, with holdings in the world's largest exchange traded fund hitting consecutive record highs. But analysts said the pace of the rise was beginning to slow. "I don't think we've seen the same level of investment into ETFs in the way we have seen earlier this year," said Tom Kendall, a precious metals strategist at Mitsubishi. "Gold really hasn't got that much pressure to move rapidly on the upside," he said. The SPDR Gold Trust, said its holdings remained at 1,124.99 tonnes on March 25, unchanged from the record hit the previous day. Spot platinum touched $1,159.00 an ounce, its highest since September 26 and was last at $1,1156 an ounce versus $1,120 an ounce late in New York on Wednesday. "The euro being stronger against the dollar has encouraged some industrial buying," said Commzerbank trader Rory McVeigh, "Not much but enough in a very thin market to lift it."

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