Gold futures back off in early U.S., near $900/oz

NEW YORK, Jan 9 (Reuters) - U.S. gold futures slipped from
a record high just shy of $900 an ounce early Wednesday as
investors kept buying and strong demand at the debut of China's
first gold futures contract underscored global bullishness.

Gold's rally comes in the context of explosive fund
interest in the commodity sector since the beginning of 2008.
Platinum also hit a new high overnight before backing off.

Despite the mild correction as New York traders sat down,
upward momentum appeared strong with sentiment underpinned by
record oil prices, a weak dollar and the flight from U.S.
equity markets into hard assets.

Building on Tuesday's more than $18 gain, gold for February
delivery at the COMEX division of the New York Mercantile
Exchange GCG8 rose to $894.40 in electronic trade overnight,
more than $10 higher than the previous day's record and up
$28.70 on the week.

At 9:21 a.m. EST (1421 GMT), the active contract was off 10
cents at $880.20 an ounce, still well above the day's low of
$873.80.

"Probably you can look at some of the index fund allocation
as a partial driver the last couple of days," said a futures
broker. "After a crazy day yesterday, everything seems to have
come to a screeching halt. So I guess some of that money is not
flowing in, at this point."

The market gained momentum after the key Japanese gold
futures price <0#JAU:> hit its highest level since March 1984
and gold futures were launched on the Shanghai exchange.

The yuan-based contract <0#SHAU:> surged to the equivalent
of nearly $1,000 an ounce on Wednesday, well above the spot
bullion high <XAU=> of $891.40, as enthusiastic new bullion
bulls got their first chance to play. [ID:nSHA232346]

"The launch of the Shanghai gold futures contract seems
likely to be the trigger for gold to hit our one-month target
of $900/oz, probably before the end of the week," UBS
Investment Bank said in a daily client note.

Spot gold fetched $875.40/6.10 an ounce, off from Tuesday's
New York close of $878.10/878.90. London bullion dealers fixed
the morning spot reference price at $887.85.

COMEX March silver SIH8 was off 10.5 cents at $15.71 an
ounce, trading from a two-month high of $16.27 to $15.645.

Spot silver <XAG=> was at $15.58/63, off from $15.70/15.75
late Tuesday. London silver was fixed at $16.00.

April platinum PLJ8 backed off a contract high of
$1,569.5 an ounce. It as down $3.50 at $1,557.00. Spot platinum
<XPT=> was quoted at $1,553/$1,557.

March palladium PAH8 had drooped $4.10 to $377.70 an
ounce and spot palladium <XPD=> fetched $373/$377.
(Reporting by Alden Bentley; editing by Jim Marshall)