NEW YORK (MarketWatch) -- Gold futures fell back early Thursday after hitting an 18-month high above $1,025 an ounce in Asian trade, as the dollar gained back some ground after slumping to its lowest levels this year.
In Tokyo trade, analysts' bleak outlook for the U.S. dollar helped gold climb to an 18-month high.
"We expect further price gains as real interest rates are likely to fall and our [foreign-exchange] analysts see further downside for the [U.S. dollar]," analysts at Credit Suisse wrote in a note to clients issued Thursday.
December gold, the most actively traded futures contract, climbed as high as $1,025.80 an ounce . It then pulled back to $1,018.20, up $2.0. The contract closed at $1,020.20, up $13.90, Wednesday in New York.
The front-month September contract, trading on very thin volume, was down $3.30 at $1,015.60 after finishing at $1,018.90 an ounce, up $13.90 in New York Wednesday.
The record intraday price for a front-month gold contract is $1,033.90 an ounce, set on March 17, 2008.
The dollar, which has served as a safe-haven asset over the past year because of its low yield, slumped to its lows of the year on Wednesday, after more upbeat U.S. economic reports.
But the U.S. currency gained back some ground early on Thursday. The dollar index (DXY 76.13, -0.10, -0.14%) , which measures the U.S. unit against a basket of six major currencies, stood at 76.222, up from 76.194 late on Wednesday.
As gold neared its record price, Chintan Karnani, an analyst at Insignia Consultants in New Delhi, warned that jewelry demand will fall across the globe and fundamental vulnerability for gold "will persist with every rise in prices." See related Asia Markets.
Gold briefly came off lows after a report that showed weekly jobless claims fell 12,000 to a seasonally adjusted 545,000 last week, their lowest level since mid-July. Housing starts increased to a 598,000-annualized pace in August. Analysts polled by MarketWatch expected initial claims to rise to 563,000 and housing starts to rise to a 600,000 rate.
