INSTANT VIEW: U.S. gold futures hit $1,000/oz, first since Feb

SINGAPORE (Reuters) - U.S. gold futures hit $1,000 an ounce for the first time since February as the dollar's weakness, concerns about the sustainability of global economic recovery and worries about future inflation underpinned sentiment.

Gold for December delivery touched $1,000, shortly after spot gold hit a six-month high above $997.20.

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* KEY POINTS:

-- U.S. gold futures hit $1,000 an ounce for first time since February.

-- Gold rises above $997.20 an ounce for first time since February.

COMMENTARY:

BEN WESTMORE, COMMODITIES ECONOMIST, NATIONAL AUSTRALIA

BANK

"It's a short-term move and I doubt it can be sustained. The longer term outlook will be dictated by the view on the dollar. No one expects the Fed to be the first to move on rates so a softening is likely.

"Mid next year I see gold moving above $1,000 on a sustained basis, supported by physical demand and limited supply, Chinese demand for jewelry and investment gold will outweigh any unwinding of the ETFs and other retail investment vehicles."

YUICHI IKEMIZU, BRANCH MANAGER, STANDARD BANK, TOKYO

"I don't think gold at $1,000 is sustainable. It is simply too expensive in light of historical levels. Those who are pushing prices up have long positions and if there are no buyers, they'll have to start unwinding their longs. I don't think there is real demand for gold around $1,000. Asians are likely to sell at these levels."

KAZUHIKO SAITO, CHIEF ANALYST, FUJITOMI CO LTD, TOKYO

"I think the rally is driven by technicals, and there is less buying of gold now as a safe haven. From a technical point of view it could hit $1,020 and $1,030 ... but I think that unlikely as there will a lot of individual investors who will want to sell at these levels."

DAVID MOORE, COMMODITIES STRATEGIST, COMMONWEALTH BANK OF

AUSTRALIA

"I don't know if it will stay there for a particularly long (period). My view is that by the end of the year, the gold price will be lower, probably down to around $950 an ounce. I think we'll see the gold price trend lower again in 2010. Obviously, there's a lot uncertainty about the outlook for gold."

SANDRA CLOSE, ANALYST, SURBITON ASSOCIATES

"Futures were always going to lead the way above $1,000, so spot can't be far behind. Gold's rising price is due to uncertainty all the way from personal investors right through to institutions. There are questions out there over the health of economies, where interest rates are going. All that encourages gold hoarding. There's potential to see the price go even higher."

SHUJI SUGATA, MANAGER, MITSUBISHI CORP FUTURES & SECURITIES

"I think these high levels could trigger selling ... and it might be difficult for gold to sustain the $1,000 level.

"However, we need to watch the dollar-euro rate and technical factors as these could prompt gold to move higher," he said.

DARREN HEATHCOTE, HEAD OF TRADING, INVESTEC AUSTRALIA

"I suspect we are targeting $1,000. We're not that far away. We'll test it. Whether or not we'll get a lot of stops just ahead of it, or just above it, given the true target is probably $1,004, I suspect there could be some selling, some profit taking. But in this market, where the volume is thin, then who knows."

MARK PERVAN, SENIOR COMMODITIES ANALYST, ANZ BANK

"The gold market has legged up into a new range, but we need to see it sustain at $1,000 for a few days to write a new long-term story. Gold bulls are easily spooked around these numbers and need to see them sustained to bolster confidence.

"Gold is rallying on fears of an equity retreat. U.S. jobs data has been pretty disappointing. The risk is that stocks will fall and people are hedging that by buying gold."

MARKET REACTION:

-- By 0046 GMT, gold stood at $997 per ounce, up from New York's notional close of $993.85.

-- U.S. gold futures for December delivery were at $999.10 an ounce, after settling down $1 at $996.70 on Friday, off an intraday peak of $998.40.

-- The dollar was trading at 1.4338 to the euro and 92.85 to the yen.

-- Japan's benchmark Nikkei was up 0.2 percent.

BACKGROUND:

-- Gold, which last topped $1,000 on February 22, rallied last week amid prospects for falls in stock markets and worries about inflation, with central banks pumping money into their economies to help fight the global recession.

-- The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings stood at 1,077.63 tonnes as of September 4, down 0.38 tonnes or 0.04 percent from the previous business day.

-- Global gold demand fell 9 percent in the second quarter to 719.5 tonnes as rising prices and the impact of the global recession curbed jewelry buying, the World Gold Council said last month, but a rise in investment demand for products such as gold-backed exchange-traded funds limited the consumption drop.

-- Second-quarter demand dropped 31 percent on the year in India, traditionally the world's largest consumer of gold, which forms an essential part of the dowry basket at weddings.

-- But demand in China, the world's second largest consumer last year, rose 6 percent to 72.5 tonnes in the second quarter.

-- Central banks became net buyers of gold in the second quarter of the year, taking 14 tonnes of the yellow metal against sales of 69 tonnes a year earlier. Net central bank sales in the first half were 38.7 tonnes, the World Gold Council said, the lowest level since the corresponding period in 1997.

(Compiled by Commodities desk; Editing by Ben Tan)