Benchmark December delivery gold (GCZ5: Quote, Profile, Research) tumbled $3.20 to finish at $476.60 an ounce on the New York Mercantile Exchange's COMEX division, after trading from a contract high of $483.10 which was also the loftiest for futures since January 1988, to a session low of $475.80.

Profit taking slammed gold by midmorning, taking several dollars off the price. It looked as though one large investment fund was either liquidating long positions or doing fresh short selling, according to floor dealers in New York.

Carl Birkelbach of Birkelbach Management Inc. in Chicago said, "It has fallen off a little bit here, as I think it's going to do" at times before it eventually hits a $500 over the next few months.

"It's the same old story supporting gold -- it's inflation, with current high oil prices -- but it also a new story that is building," he said, referring to growing concerns among investors about U.S. economic growth and geopolitical issues like the ongoing war in Iraq.

Gold, which is seen as one of the classic "hard assets" investors turn to in times of uncertainty, has risen about 8 percent this year, based on the nearby COMEX futures contract.

That compares with a more traditional investment such as the S&P 500 Index , which has lost 2.8 percent over the same period.

"There is a higher level of economic uncertainty out there superimposed on some traditional seasonal strength at this time of the year, so I'm not altogether surprised by the current activity," said Geoff Stanley, precious metals and minerals analyst at BMO Nesbitt Burns in New York.

But, Stanley cautioned that a huge fund net long position on COMEX, which has hit a record high, could set the market up for a sell-off if there was disappointing news on gold or a shift in concerns about oil, currencies or the economy.

Both Birkelbach and Stanley said that gold probably would trade between about $450 and $500 over the intermediate term.

One COMEX trader said he viewed chart support in December gold at $475.20 and then at levels down to $468, with resistance seen up at $484.50.

Spot gold shot to an 18-year high of $480.25 an ounce early Wednesday but later fell to $472.25/3.00 in New York, versus a prior close of $476.60/7.40. Wednesday's London afternoon fix by bullion dealers was at $475.10.

Gold has been rallying in many currencies, as well as against an old rival, the dollar. It scaled a record high in euro terms (XAUEUR=R: Quote, Profile, Research) at 401.41 euros per ounce and a 12-year high in sterling at 275.82 British pounds per ounce (XAUGBP=R: Quote, Profile, Research) .

In the past, gold has kept a tight inverse link to the dollar, with a stronger greenback usually making the dollar-denominated metal less attractive to investors.

Final estimated COMEX gold volume was 75,000 contracts, up from 40,730 lots on Tuesday. Open interest rose 739 contracts to 370,844 lots as of Oct. 11.

Other metals recently supported by the rising tide of investment in gold also slipped back with the yellow metal late on Wednesday.

COMEX December silver (SIZ5: Quote, Profile, Research) fell 3.7 cents to $7.838 an ounce, trading from $7.80 to $7.925. The market has hovered near a 10-month high and traders felt it could target the $8 level.

Spot silver slipped to $7.74/76 an ounce from $7.81/84 at Tuesday's close. The fix was $7.845.

On the board at NYMEX, January platinum (PLF6: Quote, Profile, Research) ended off $2 at $945.50 an ounce after futures earlier hit their highest since April 2004 at $951. Spot platinum last was at $942/945 -- touching a 25-year peak.

December palladium (PAZ5: Quote, Profile, Research) was the only gainer, up $2.70 at $215.40 an ounce, and not far from a seven-month high touched earlier at $215.70. Spot was stable at $208/212.

NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq and all other quotes delayed by at least 15 minutes. Reuters does not endorse the views or opinions given by any third party content provider.

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