LONDON, April 25: Gold steadied after hitting three-week lows on Friday as the dollar cut early gains against the euro and oil prices rose after slipping, analysts said.

But gold was expected to face downward pressure again after falling nearly 15 per cent from record highs set on March 17.

Selling gathered pace after gold broke its 100-day moving average of just above $900 an ounce this week, they said.

Spot metal fell as low as $877.60 an ounce before rising to $884.70/885.70 at 1022 GMT, against $885.25/886.45 in New York late on Thursday. A level below $872.90 would be the lowest price in three months.

The metal is also generally seen as a hedge against oil-led inflation. Oil prices steadied after falling earlier in the day.

Further strengthening in the dollar has undermined the gold price, Fairfax investment bank said in a report.

Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $4.00 to $885.40 an ounce in electronic trading.

Gold is likely to have already reached the year’s high and to come under pressure particularly in H2. We thus recommend not only closing long positions in gold, but also selling gold short, it said.

In June 2007, the bank said it would sell 250 tons of gold by September 2009, in line with an agreement among European central banks to limit gold sales to 500 tons a year.

Last year, it sold 145 tons of gold under the announced programme.

In other precious metals, platinum partly recovered after falling to a three-week low of $1,907 an ounce. It was last quoted at $1,932/1,942, still down from $1,961.50/1,971.50 late on Thursday. It hit a record high of $2,290 on March 4.

But precious metals consultancy GFMS Ltd said on Thursday that platinum may spike to a record high of $2,400 an ounce this year as the investment climate continued to be positive and fundamentals remained strong.

Silver was at $16.59/16.65, down from $16.68/16.78 an ounce, while spot palladium fell to $433/441 an ounce from $435/441 in the US market late on Thursday.—Reuters