Gold Retreats From Record as Dollar Firms

LONDON (Reuters) - Gold prices retreated on Thursday from the record highs they hit in the previous session as the dollar rose ahead of policy decisions from the UK and the euro zone, which curbed appetite for assets seen as higher risk.

The precious metal reached a high of $1,097.25 an ounce on Wednesday after a pledge from the U.S. Federal Reserve to keep interest rates low knocked the dollar. But the currency bounced back, diminishing interest in gold as an alternative asset.

Spot gold was bid at $1,090.10 an ounce at 1024 GMT (5:24 a.m. EST), against $1,092.35 late in New York on Wednesday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $3.40 to $1,090.70 an ounce.

"The fact that we didn't manage to go through $1,100 might lead some investors to reconsider their positioning in the sector," said Commerzbank analyst Eugen Weinberg.

"Should the dollar become stronger over the coming days I would expect to see more profit taking," he added.

"If the ECB provides some impulses on euro-dollar, it might be the thing to take us to the next step, but I think more probably we will see a prolonged correction right now, because the trend of the last few weeks is becoming a bit too pronounced."

The dollar gained broadly, paring earlier losses after the Federal Reserve pledged to keep interest rates low, as investors turned cautious before policy decisions from the Bank of England and European Central Bank.

The BoE will announce its decision at 1200 GMT (7 a.m. EST), with the market bracing for a possible further increase in asset purchases, while an ECB decision and news conference follow at 1245 GMT (7:45 a.m. EST)and 1330 GMT (8:30 a.m. EST).

CENBANKS EYED

Speculation continued over the prospect of further central bank gold acquisitions, after India's purchase of 200 tonnes of bullion from the International Monetary Fund on Monday. The report helped push gold to record highs.