US gold futures held firm after scaling a 25-year peak above $703 an ounce early on Wednesday, as markets mainly marked time before a decision on interest rates by the US Federal Reserve, dealers and analysts said.
Robust investment buying driven by US-Iran tensions, a weaker dollar and near-record oil prices continues to underpin the precious metal, although gold could see a correction lower at any point with prices at overbought levels, they added.
In other metals, platinum shot to a fresh all-time high, while silver and palladium prices retreated on profit-taking.
By 11:10 am EDT, June delivery gold on the New York Mercantile Exchange's COMEX division gained $2.40 to $703.90 an ounce, trading from $695.50 to $706.80.
The day's peak marked COMEX gold's highest since September 1980. It set a record at above $870 in January of that year.
Futures are up 38 percent in the year to date and 57 percent since the start of 2005, as investors increasingly diversify their accounts with more of the hard asset.
Jeffrey Christian, managing director of research firm CPM Group, said the weak dollar continues to bolster gold because investors are seeking a greenback alternative more and more.
Gold bullion hit a record high at $850 in January 1980.
Spot gold climbed to as high as $704.50 overnight before slipping to $699.80/700.80 an ounce, vs. Tuesday's New York close at $699.90/700.90.
COMEX July silver tumbled 16.5 cents to $14.30 an ounce, dealing between a three-week high of $14.58 and a low of $14.00. Futures shot to a 23-year peak at $14.84 April 20.
Spot silver fell to $14.34/14.44, down from its last close at $14.44/54.
NYMEX July platinum rose $14.70 to $1,254 an ounce, just shy of a new high at $1,268.50. Spot platinum was up at $1,247/1,252.
June palladium slipped $2.90 to $392 an ounce. It earlier hit a four-year high of $399.10. Spot palladium traded at $386/391.
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