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Solid gold in the shape of Japan's Mount FujiYURIKO NAKAO

Gold fell after a brief rally to a record high Thursday, snapping a six-session winning streak, as technical selling more than offset investor jitters over a European debt crisis due to a politically unstable Portugal.

Bullion retreated after hitting an all-time peak $1,447.40 (U.S.) an ounce, and silver also pulled back from 31-year high. The metals were initially underpinned by concerns over the health of the bloc, violence in the Middle East and North Africa, and fears over inflation.

"There was no follow-through support after we went to new highs earlier in the session. It's been basically technical selling," said Scott Meyers, senior analyst of Pioneer Futures Inc. "It's what technicians call a reversal day."

Spot gold dropped 0.3 per cent to $1,432.35 an ounce by 2:50 p.m. ET. Before Thursday's pullback, bullion had gained about 4 per cent during the last six sessions.

Silver gained 0.5 per cent to $37.55 an ounce, having earlier rose to a 31-year high of $38.13.

Investor sentiment could take a hit after the CME Group raised silver futures margins by 5.5 per cent.

Silver has gained more than 40 per cent since late January on strong industrial demand amid near-term supply tightness.

On Thursday, gold charts resembled a top reversal day pattern, where a new high has been set in an uptrend and is followed by a close below that of the previous day.

A key reversal day could mark an important turning point on technical charts. Mr. Meyers said, however, gold's decline was a healthy pullback, setting its stage for further rally into record highs.

U.S. gold futures for April delivery settled down 0.2 per cent at $1,434.90.

COMEX gold was one of the most actively trading commodity markets with volume above 200,000 contracts, set for one of the heaviest trading days in the last two months.

The return to prominence of euro zone sovereign debt fears, a key factor pushing gold prices to record levels last year, has given a fresh boost to both silver and gold on Thursday.

The crisis in the Portuguese government following the resignation of its prime minister is expected to dominate a summit of EU leaders on Thursday and Friday, with Lisbon under intense pressure to seek a bailout package.

"The gold price is currently supported by safe-haven demand, stemming from three current crises - Libya and more generally unrest in the Middle East/North Africa region, Japan and renewed concerns over the periphery of Europe, particularly Ireland and Portugal," said BNP Paribas analyst Anne-Laure Tremblay.

Commodity fund managers said that precious metals are also supported by Wednesday's disappointing new home sales data, which could lead to an extension of the Fed's $600-billion bond buying program - dubbed QE2 because it is the second round of quantitative easing - before it is scheduled to end in June.

"The world wants to own any kind of hard assets. There is plenty of liquidity in the system created by the Fed and by the Bank of Japan. That money, in the interim, is finding its way into equities and into gold," said Dennis Gartman, publisher of the Gartman Letter, a daily investment newsletter.

Last Friday, central banks of the Group of Seven rich nations coordinated to pour billion of dollars into markets to depress the value of the yen after Japan's devastating earthquake and nuclear crisis triggered a yen surge and raised fears about the global economy.

Market sentiment in platinum group metals, mainly used as auto catalysts in vehicles, improved after Toyota Motor Corp. said Thursday it would restart production of three hybrid models next week after a massive earthquake this month disrupted output across the industry.

Platinum slipped 0.1 per cent to $1,750.50 an ounce, while palladium gained 0.2 per cent to $747.50.