Gold surged to a historic high above $910 an ounce, as investors rushed to buy the metal on further weakness in the dollar and expectations of a sharp cut in U.S. interest rates.

But the metal pared gains in afternoon European trade as some investors decided to take profits from a rally that saw prices jumping 50 percent in the past year, including a 15 percent rise in the last 30 days.

Gold's surge on the day also prompted buyers to snap up other precious metals, with platinum hitting a record high before giving up some gains. Silver was quoted below a 27-year peak, while palladium traded off its highest in two months.

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"It's human nature to buy into a market that is already showing strength. Most fund managers have a herd mentality and they are just attracted to gains. Gold could go higher still, but we don't think this is a right time for buying," said Robin Bhar, metals analyst at UBS Investment Bank.

"From a technical perspective, we would obviously need to see a close above $900 that would be construed as a bullish sign. But fundamentally, we are very cautious and would not advocate going long here because positioning is still extreme. There is a risk of $50-$100 dollar correction at any time."

Spot gold jumped as high as $914 an ounce before falling to $906.60/907.30 by 1549 GMT, against $895.70/896.50 in New York late on Friday.

U.S. gold futures touched $915.90 an ounce, surpassing Friday's record high of $900.10. The most active February contract was later quoted at $906.80, up $9.2 an ounce.

Japanese gold futures were closed for a holiday.