LONDON, Feb 19: Gold eased from the seven-month high it hit earlier on Thursday as investors took profits, while traders said an uptick in interest in other assets such as equities was also diverting interest from bullion.

But the precious metal is likely to be gathering strength before another push towards fresh highs above $1,000 an ounce, on burgeoning interest in the metal as a haven from risk, analysts say.

Spot gold eased to $971.10/972.70 an ounce at 1010 GMT from $984.50 late in New York on Wednesday. Earlier it touched a peak of $985.95 an ounce, its strongest level since July 15.

Gold climbed nearly 5 percent this week to its Wednesday peak, as fear over the outlook for the financial system and fears over rising inflation in the longer term prompted investors to buy gold as a safe store of value.

Buying of gold-backed exchange-traded funds in particular is very strong. Holdings of the world’s largest gold-backed ETF, the SPDR Gold Trust , rose 1.5 per cent to a record 1,024.09 tons as of Wednesday.

Gold’s other main external driver, the oil price, also exerted little influence over the metal. Crude futures climbed nearly 2 per cent to just over $35 a barrel.

Among other precious metals, spot silver dipped in line with gold to $14.15/14.21 an ounce from $14.32. Earlier it peaked at $14.38, its strongest level since mid-August.

Spot platinum dipped to $1,074.50/1,079.50 an ounce from $1,097.50, while spot palladium slid to $213/217 an ounce from $217.

The chief executive of the world’s number two platinum producer Impala Platinum Holdings said the company was revising its production strategy in response to falling demand.

He said Impala’s output target for 2009 had been cut, and that he sees lower metal output in the next 18-24 months.

Both platinum and palladium prices have fallen sharply in the last year as demand from carmakers, the major users of the metals, slumped.—Reuters