(Updates with closing in Tokyo)
By Lewa Pardomuan
SINGAPORE, Jan 10 (Reuters) - Gold softened in volatile
trade on Thursday but held near a record high hit the previous
day, with dealers expecting the market to undergo a correction
before it hit the $900 an ounce target.
Spot gold <XAU=> fell to $876.95/877.65 an ounce from
$877.70/878.50 late in New York as speculators booked profits.
It hit an all-time high of $891.40 on Wednesday on investor
buying and a strong debut for the Shanghai gold futures
<0#SHAU:>.
"Technically, gold is still very much biased to clock new
highs. Momentum is showing no signs of cooling and any pullback
would ideally trigger fresh buying interest," said Pradeep
Unni, an analyst at Vision Commodities in Dubai.
"The next probable stop for gold is around $920 and that is
likely to be witnessed before the Fed decision or immediately
after that," he added.
Recent grim U.S. manufacturing and employment data has
intensified the likelihood the Federal Reserve will cut rates
by half a percentage point later this month. Markets await Fed
Chairman Ben Bernanke's first comments on the economy in 2008
on Thursday.
The euro inched up to $1.4677 <EUR=>, above a one-week low
of $1.4639 hit the previous day.
Unni added, however, that there was a rising fear that
physical demand in gold could lose momentum as many buyers were
not prepared to pay the currently high prices.
"Possibilities of increased scrap sales and muted physical
prices could negate potential for further rise."
Gold, which gained more than 30 percent in 2007, entered
the new year on a firm note, rising more than 6 percent on
speculative buying ignited by a struggling dollar and record
high crude oil prices <CLc1>.
"I don't think it's sustainable above $880 level. There was
buying out of Japan yesterday morning. They were buying not
because they were bullish, they were cutting losses," said
William Kwan, a dealer at Phillip Futures in Singapore.
"I am looking at the downside risk within a time frame up
to next Tuesday. I am looking at as low as at $860 for the
first support. If we are to see a lower range, we might see
$825 which is a major support," he said.
Tokyo gold futures reversed gains on firming yen <JPY=> and
profit taking. The key gold futures contract for December 2008
delivery <0#JAU:> on the Tokyo Commodity Exchange ended 17 yen
per gram lower at 3,117 yen.
It reached an intraday high 3,173 yen, the highest for a
benchmark since March 1984, on Wednesday, and dealers said a
rally in Tokyo helped spur buying in Shanghai futures.
COMEX gold futures also gave up early gains in Asia, with
the most active February contract <GCG8> down $2.3 an ounce
from New York at $879.4.
Shares in Australian gold miners fell as gold slipped from
record highs. Newcrest Mining <NCM.AX> dropped 2.62 percent and
Lihir Gold <LGL.AX> lost 0.76 percent.
Platinum <XPT=> dipped to $1,535.50/1,539.50 from
$1,550/1,554 an ounce late in New York on Wednesday, when it
hit a record of $1,560.
Silver <XAG=> fell to $15.59/15.64 an ounce from
$15.67/15.72 late in New York. Palladium <XPD=> dropped to
$372.50/375.50 an ounce from $373/377.
Precious metals prices at 0853 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 877.05 -0.75 -0.09 5.33
Spot Silver 15.62 -0.05 -0.32 5.75
Spot Platinum 1540.00 -10.00 -0.65 1.32
Spot Palladium 372.50 -0.50 -0.13 1.22
TOCOM Gold 3117.00 -17.00 -0.54 1.86
129451
TOCOM Platinum 5310.00 -27.00 -0.51 -0.54
46575
TOCOM Silver 552.50 -11.10 -1.97 2.13
1853
TOCOM Palladium 1333.00 -17.00 -1.26 -1.33
637
Euro/Dollar 1.4675
Dollar/Yen 109.77
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
