(Adds closing in Tokyo, comments on India's gold imports)
By Lewa Pardomuan
SINGAPORE, Jan 15 (Reuters) - Gold rose on Tuesday and held
near an historic high hit the previous day, reflecting
investors' interest in the metal as the dollar dropped on
expectations of half-percentage-point cut in U.S. rates.
Platinum hovered near record highs, silver kept within
sight of a 27-year peak hit on Monday, while palladium stayed
near a two-month high struck the previous day.
The market shrugged off news that gold imports by India,
the world's main consumer of the metal, could have fallen by 20
percent in 2007 due to rising bullion prices.
"Given the jitters from the credit crunch around the world,
demand for safe-haven assets like gold is going to remain
relatively high," said Craig James, chief economist at
Commonwealth Securities in Sydney.
Spot gold <XAU=> rose to $907.00/907.75 an ounce from
$902.10/902.80 an ounce late in New York. Bullion touched an
all-time high of $914 an ounce on Monday on investor buying
driven by the dollar's slide and financial market turmoil.
"But certainly in the current environment, prices of $920
and $930 an ounce can't be ruled out. The U.S. dollar is
probably going to remain weak on expectations of significant
rate cuts in the U.S. to support growth," said James.
Gold's appeal as an alternative investment is increasing as
the greenback comes under pressure on concerns that some of the
largest U.S. banks will report weaker earnings this week --
raising expectations for further rate cuts.
Record high oil <CLc1> also ignited safe-haven buying
against inflation.
Citigroup is the first in line among banks to report its
fourth-quarter earnings, due on Tuesday. Markets will be
watching for indications of how much the credit crisis is
damaging the banks' bottom lines and increasing the risk of a
recession. []
The euro edged up to $1.4874 <EUR=> but was off Monday's
peak of $1.4915, a seven-week high.
COMEX gold futures also hovered near a record high hit the
previous day. The most active February contract <GCG8> gained
$7.6 an ounce to $911.0 an ounce.
"All factors pointing to a more positive sentiment in the
market remains," Albert Cheng, managing director, Far East,
World Gold Council, told Reuters via e-mail.
"The price is being driven by a number of long and
short-term factors, including a weak dollar and instability in
the global financial markets, which play to gold's proven
strengths as an inflation hedge, a dollar hedge and an
insurance against extreme movements.
In the physical sector, consumers in India turned their
backs on jewellery shops as gold hit record high, but others
showed more resilience with dealers noting demand out of China
and other parts of Asia. []
"Indian gold imports may be 20 percent less than last
year," said Suresh Hundia," the president of the Bombay Bullion
Association told Reuters on Tuesday.
"If prices keep increasing like this, then imports will
again fall drastically in 2008," he added.
In 2006, India imported about 715 tonnes of gold.
The key gold futures contract for December 2008 delivery
<0#JAU:> on the Tokyo Commodity Exchange (TOCOM) ended 4 yen
per gram lower at 3,164 yen, giving up early gains to a firm
yen.
Platinum <XPT=> rose to $1,578/1,583 an ounce from
$1,572/1,577 an ounce late in New York on Monday, when it
spiked to a record high of $1,590 an ounce to track gold's
rally.
Silver <XAG=> rose to $16.42/16.47 an ounce from
$16.31/16.36 late in New York, but was off Monday's 27-year
high of $16.58 an ounce.
Palladium <XPD=> fell to $378/383 an ounce from $379/384,
but remained near Monday's two-month high of $380 an ounce.
Precious metals prices at 0841 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 908.80 5.30 +0.59 9.14
Spot Silver 16.45 0.10 +0.61 11.37
Spot Platinum 1578.00 3.00 +0.19 3.82
Spot Palladium 378.00 2.00 +0.53 2.72
TOCOM Gold 3164.00 -4.00 -0.13 3.40
101540
TOCOM Platinum 5371.00 -12.00 -0.22 0.60
40295
TOCOM Silver 571.80 -2.40 -0.42 5.69
2103
TOCOM Palladium 1328.00 -12.00 -0.90 -1.70
913
Euro/Dollar 1.4862
Dollar/Yen 107.42
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Biman Mukherji in New Delhi; Editing
by Ben Tan)
