US gold futures retreated early on Wednesday, but still held near Tuesday's 18-year high above $500 an ounce, as investors pocketed some gains from the metal's recent blistering rally, dealers and analysts said.
At the COMEX division of the New York Mercantile Exchange, new benchmark February delivery gold shed $4 to stand at $499.50 an ounce by 10:43 am EST.
Traders saw further consolidation at current levels as likely, with players awaiting the next move from the large funds that have fuelled the metal's 14 percent rise this year.
December gold, the most active contract before Wednesday, rose as high as $502.30 on Tuesday in NYMEX ACCESS off-hours electronic trade
Gold has found favour with hedge funds diversifying into commodities to enhance returns, along with its classic role as a hedge against inflation and a weak dollar.
It also has attracted new interest amid geopolitical unease and overall economic uncertainty and on expectations that Russia, Argentina and South Africa are friendly to boosting the amount of gold in their reserves.
Traders over the past day predicted gold would range from $450 to $575 in 2006.
Fundamentally, gold demand for investment and usage in jewellery is strong, while supply remains limited.
Estimated COMEX gold volume was 20,000 lots by 10 am NYMEX was raising the margins on its gold and silver futures contracts as of the close of business Wednesday.
Spot gold was last at $494.90/495.60, down from $499.70/500.50 at Tuesday's New York close. The afternoon fix in London was at $495.65. Newly active March silver fell 8.0 cents to $8.325 an ounce, trading from $8.41 to $8.275.
Spot silver slipped from prior 1-1/2-year highs to stand at $8.22/24 an ounce, off from $8.30/32 previously. The fix was at $8.21.
On the board at NYMEX, January platinum sank $20.20 to $983 an ounce, pulling back some more from Monday's peak at $1,011 - the highest price since March 1980. Spot platinum fetched $975/980, off from its close at $992/995 and Tuesday's almost 26-year high of $1,002. Benchmark March palladium lost $4.10 to $264 an ounce. Spot palladium hit $256/260, versus $263/267.