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Profit-taking pulls early NY metals off new highs

NEW YORK, Dec 18 (Reuters) - The tumbling dollar hoisted New York gold, silver and platinum to multi-year highs early Thursday, but profit-taking pulled the rug out before futures trade opened.

COMEX gold beat the last near-8-year high from Dec 10, playing catch-up with the runaway euro. The euro extended a string of lifetime highs to $1.2436 overnight, enhancing the bullion buying power of European investors.

"It looks like some profit-taking. There were a lot of longs," said a floor broker. "Everybody was very bullish this morning."

At 10:25 a.m. EST (1525 GMT), benchmark February gold was down $3.20 at $409.50 an ounce. It hit $414.60, its highest since February 1996, before tumbling to $408.50.

Dealers said volume was thinning out, with year-end holidays starting next week. Book squaring is always a consideration in December, although funds seem content to hold winning long positions accumulated during the 2003 rally.

Gold demonstrated its resilience this week by holding above $400 an ounce following the capture by U.S. troops of former Iraqi leader Saddam Hussein after eight months of hunting.

Interest in gold as a safe-haven asset remains a supportive factor because few expect the attacks on coalition security forces to drop off suddenly, even with the symbolic head of the Iraqi resistance in U.S. custody.

Spot gold was quoted at $408.30/8.80 versus Wednesday's last quote at $411.75/412.50. London bullion dealers fixed the afternoon reference price at $407.50.

COMEX March silver hit its highest since September 1999. It was off 5.3 cents at $5.655 an ounce, falling to $5.65 from $5.76. Spot silver was quoted at $5.63/65, down from $5.66/68 late Wednesday. The fix was at $5.70.

At the NYMEX, January platinum hit a new 23-year high at $847.70 an ounce before skidding $20.60 to $819.20 in thin trade.

Spot platinum fetched $826.00/831.00.

Short-covering on the Tokyo Commodity Exchange sent TOCOM futures soaring before the abrupt reversal.

Speculators have been competing with industrial consumers to get on the right side of the market. On the supply side, the strength of South Africa's rand against the tumbling dollar has forced producers in the world's top platinum exporter to curtail production.

"Some people got it right and have actually been using it as chance to take profits," said a New York bullion trader.

Thinly traded March palladium was $1 firmer at $205 an ounce. Spot was at $199.00/204.00.