(Agencies)
Updated: 2008-03-07 09:24

NEW YORK -- Precious metals prices fell sharply Thursday, ignoring a tumbling dollar and spiking crude prices after South Africa said it would ease power rationing for some of the world's biggest gold and platinum mines.

Other commodities traded mixed, with crude oil rising to another record above $105 and agriculture futures trading mostly lower.

Gold, silver and copper prices have risen steadily in recent days amid the dollar's slide to record lows against the euro. The greenback sank to a new record Thursday with the euro buying as much as $1.5393, up from $1.5262 on Wednesday. A weak dollar typically encourages investors to shift funds into hard assets like gold and silver, which are known for holding their value.

But investors sold metals off Thursday after South Africa -- the world's largest platinum producer and second largest gold producer -- said it would give the country's mines 95 percent of their normal power supply. The mines have been operating at 90 percent since a national energy shortage last month crippled the vital mining industry and sent commodities prices soaring.

"This has had a knock-on effect on silver and gold to some degree, because the euro-dollar movements don't explain the decline in gold," said James Steel, precious metals analyst with HSBC in New York. "It is rather unusual that the (metals) markets are down in the face of a strong euro and weaker dollar. Generally the two move in tandem."

Gold for April delivery shed $11.40 to settle at $974.50 an ounce on the New York Mercantile Exchange, after earlier falling as low as $966.50. On Wednesday, gold surged to a trading high of $995.20 -- just shy of the psychologically important $1,000 mark.

Gold has gained 15 percent this year and rose 31 percent in 2007, driven up by dollar weakness, record crude oil prices and worries about the US economy.

Some analysts have warned that gold is overpriced, but most still expect it to surpass the $1,000 level.

"Right now, $1,000 remains very tempting despite this latest pullback," Steel said. "The market will be drawn to it because it's such a psychologically massive number."

Other precious metals also declined Thursday. Platinum for April delivery plummeted $75.30 to settle at $2,200.80 an ounce on the Nymex. Earlier the metal sank as low as $2,151.10.

Silver for March delivery rose to a 27-year high of $21.10 an ounce before pulling back to settle at $20.131, down 55.4 cents. Nymex copper lost 7.5 cents to settle at $3.9145 a pound, after earlier rising to a record $4.0155.

Energy markets, meanwhile, fluctuated in a choppy session that saw crude rise to another record close Thursday on the dollar's continuing slide versus the euro.

Light, sweet crude for April delivery rose 95 cents to settle at a record $105.47 a barrel on the Nymex, after earlier hitting a new trading record of $105.97. Prices gyrated between gains and losses as some investors cashed in profits.

Other energy futures also rose. April heating oil futures rose 3.02 cents to settle at a record $2.9733 a gallon on the Nymex, while April gasoline futures rose 1.11 cents to settle at $2.6532 a gallon.

In agriculture markets, soybean for May delivery dropped 49.75 cents to settle at $14.5875 a bushel on the Chicago Board of Trade, while March corn settled flat at $5.57 a bushel. Earlier, corn rose to a record $5.6275 a bushel.

Meanwhile, wheat for May delivery gained 20 cents to settle at $11.25 a bushel.