Gold futures made a steep tumble on Thursday after hitting a record high over $995 an ounce in the previous session, as traders cashed in gains.

After earlier falling as low as $966.50 an ounce, gold for April delivery more recently dropped $14.80 to $973.70 an ounce on the New York Mercantile Exchange.

On Wednesday, gold rallied $22.20 to $988.50 an ounce. Earlier, the benchmark contract surged to a record high of $995.20 an ounce.

South Africa, the world's second largest gold producer, said it will let mines increase power consumption from 90 to 95 percent of normal as the country's power crisis has stabilized.

Analysts still expect gold to break through the $1,000 level, but think it may take several forays.

Gold has gained nearly 20 percent in 2008 as speculators, funds and investors poured money into precious metals on expectation of further interest rate cuts in the U.S. and record-high oil, which lift its safe-haven appeal.

On the currency markets, the euro soared to a new record high after the European Central Bank President Jean-Claude Trichet said they expect a more protracted period of high inflation rates compared to a few months ago.

The dollar index, which tracks the performance of the greenback against other major currencies, dropped 0.6 percent to 73.05.

In energy markets, crude-oil futures edged lower, after soaring to a record high of $105.97 a barrel Thursday.

The ongoing weakness in the dollar and fresh highs for oil look set to entice further anti-recessionary/inflationary hedging toward gold and will ultimately push the metal higher, said James Moore, analyst at

The big question now is how much resistance lies ahead of $1,000, or perhaps as was seen at $850 an ounce, how many stops lie in hiding above? Moore asked in a research note.

Gold warehouse inventories rose by 27,725 troy ounces to stand at 7.4 million troy ounces as of late Wednesday, according to Nymex data.