* Gold tracks euro higher, off 1-month low
* Investors brace for ECB rate meeting
* Oil up $1 a barrel
(Updates prices)
SINGAPORE, Jan 14 (Reuters) - Gold edged up to track a
firmer euro and crude oil Wednesday, but trade was thin, with
investors careful about taking large positions ahead of a
European interest rate cut that could sap the single currency.
Investors expect the European Central Bank to slash
interest rates on Thursday by 50 basis points from 2.5 percent
now, to help fight the economic downturn. []
Gold <XAU=> was at $824.40 an ounce, up $3.35 from New
York's notional close on Tuesday, when it dropped to a 1-month
low of $813.10 before bouncing back to track gains on crude
oil.
"I think everyone is cautious ahead of the ECB meeting. The
correlations are a bit mixed recently. I mean, the dollar was
up against the euro yesterday but we also saw some strength in
gold," said a dealer in Singapore.
The euro bounced from its weakest in a month against the
dollar but was still under pressure ahead of the ECB meeting.
The euro firmed to $1.3264 <EUR=> after hitting a one-month low
of $1.3140 on trading platform EBS. []
In theory, a weaker dollar lifts gold's appeal as an
alternative investment as the world tilts into recession. But
commodity prices, quoted in dollars, often suffer when the
dollar is strong, as it weakens the buying power of investors
using other currencies.
Oil <CLc1> rose more than $1 a barrel, aided by cold
weather in the United States and an announcement of further
production cuts from Saudi Arabia. []
Oil was likely to dictate movements in gold in coming days,
but dealers also expected physical buying to offer support if
the energy market reversed course again. Dealers noted buying
on dips ahead of the Lunar New Year later in January.
"Demand gradually becomes very strong in Asia. $800 is the
bottom price for the time being," said Yukuji Sonoda, precious
metals analyst at Daiichi Commodities in Tokyo, referring to a
level seen late in November.
Gold's recent falls also attracted buying from jewellers in
Japan, while platinum, which has lost more than half of its
value since hitting a record above $2,200 last March, also
enjoyed steady demand, said Sonoda.
"The price has decreased so much. The economic situation is
so bad but jewellery demand is stable," said Sonoda.
Gold was around 7 percent below an 11-week high of $889.55
hit in late December but has bounced more than 20 percent since
falling to a13-month low around $680 in late October.
Bullion hit an all time high of $1,030.80 an ounce last
March.
Platinum <XPT=> was trading at $954.50 an ounce, up $13.50
from New York notional close. New York gold futures <GCZ9>
added $4.3 an ounce to $825.0 in electronic trade.
Precious metals prices at 0301 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 824.40 3.35 +0.41 -1.00
Spot Silver 10.77 0.05 +0.47 -27.08
Spot Platinum 954.50 13.50 +1.43 -37.20
Spot Palladium 184.00 2.00 +1.10 -50.00
TOCOM Gold 2379.00 10.00 +0.42 -22.25
16803
TOCOM Platinum 2748.00 96.00 +3.62 -48.53
7540
TOCOM Silver 307.50 8.90 +2.98 -43.16
153
TOCOM Palladium 537.00 11.00 +2.09 -60.25
67
Euro/Dollar 1.3275
Dollar/Yen 89.49
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Clarence Fernandez)
