LONDON, March 10: Gold eased on Monday after rising nearly 1 per cent in Asia as the dollar pared losses, and analysts said the metal was likely to trade in a range ahead of a US Federal Reserve meeting next week.

But expectations of further interest rate cuts in the United States and record high oil prices that have raised fears of inflation, were likely to sustain investor interest in gold over the medium to long-term, they said.

Spot gold rose as high as $980.40 an ounce before falling to $970.90/971.80 against $972. 60/973.40 late in NY on Friday.

The upward trend is still in place. People are just waiting for something to take it up towards $1,000 or may be above it, said Michael Widmer, metals analyst at Lehman Brothers.

Gold roared to an historic high of $991.90 an ounce on March 6 before funds cashed in. The metal has gained nearly 20 per cent in 2008, on the top of a 32 per cent rise last year.

The metal’s failure to break higher on Friday suggests the market may, just for the short-term, be in need of a phase of consolidation before challenging $1,000, said James Moore, precious metals analyst at TheBullionDesk.com.

Momentum indicators have turned negative over the past two trading days and a break below $968.50 would suggest a test back to $952 initially, although further liquidation could pressure gold back to $936/$924, he said in a market note.

The market kept a close eye on external price drivers such as the dollar and oil for short-term direction.

Platinum fell below $2,000 an ounce on news that mines in S. Africa, the world’s top platinum producer, would get 95pc electricity supply against 90pc. The metal has fallen 13pc from its record high of $2,290 on March 4.

Spot platinum fell to $1,986/1996 an ounce after rising 3 per cent to $2,085, against $2,020/2,030 in New York.

South Africa’s Harmony Gold, the world’s fifth-biggest gold producer, has disputed reports the mining sector would get a blanket increase in power to 95 per cent and said only certain firms would get more electricity.

Silver fell to $19.87/19.92 from $20.11/20.16 an ounce, while palladium was down at $471/480 an ounce, against $485/490 an ounce.—Reuters