* Dollar recovers from year-low against euro
* Turkey's gold imports set to hit historic low this year
* Russia mulls sale of 20-50 T of gold
(Updates prices, adds comment)
By Rebekah Curtis and Jan Harvey
LONDON, Oct 23 (Reuters) - Gold turned lower on Friday,
giving up gains that took it close to its record high, after
better-than-expected U.S. housing data lifted the dollar.
A slide in oil prices of more than $1 a barrel also added
some pressure to gold, dealers said.
Gold <XAU=> was bid at $1,058.70.20 an ounce at 1437 GMT,
versus $1,060.00 late in New York on Thursday, having earlier
touched a high of $1,067.30.
With jewellery demand weak as prices rise and buying of
investment products like bullion-backed exchange-traded funds
also soft, gold has failed to revisit last week's record high
despite the U.S. dollar plumbing new lows.
"We have had dollar weakness all week without really any
follow-through on gold," Saxo Bank senior manager Ole Hansen
said.
Dollar weakness typically boosts investor interest in the
metal as a hedge against the U.S. currency, while also making
gold cheaper for investors holding other currencies.
The U.S. unit was lifted on Friday by a survey that showed
sales of existing U.S. homes rose last month to a two-year high,
boosting hopes the housing market is on the mend. []
But analysts say more losses are expected in the dollar --
down more than 7 percent so far this year -- after it hit its
weakest in 14 months against the euro <EUR=> early in the day.
If this transpires, it is likely to support gold.
"If the dollar continues to weaken in the same manner, I
wouldn't be surprised to see this range of $1,050-1,065 broken
and (gold heading) for the $1,070 area," said Afshin Nabavi,
head of trading at MKS Finance in Geneva.
Oil -- strength in which tends to benefit gold, which is
often seen as an inflation hedge -- fell below $81 a barrel on
Friday, amid fears the rally that took it to year highs of $82 a
barrel earlier this week were overdone. []
U.S. gold futures for December delivery <GCZ9> were at
$1,066.30 an ounce, up $7.70, after falling $5.90 to $1,058.60
on Thursday.
RUSSIA PLANS GOLD SALE
The Russian government wants to sell to the world market
20-50 tonnes of gold <XAU=> from the state repository Gokhran
until the end of this year, a source familiar with the matter
told Reuters on Friday. []
This bucks the trend for central banks to retain gold as a
portfolio diversifier. According to the World Gold Council, net
sales by central banks in the first half of 2009 were the lowest
since 1997, and they turned net buyers in the second quarter.
The market did not react strongly to the news. "People are
looking more to the medium to long term, and the fact that it
looks like central banks could become net buyers (of gold) in
2009," said Mark O'Byrne, director of bullion dealer GoldCore.
News on gold demand suggested conditions were soft. The SPDR
Gold Trust <GLD>, the world's largest gold exchange-traded fund,
said its holdings stood at 1,108.094 tonnes on Thursday,
unchanged from the previous day. []
Meanwhile a senior industry official said Turkey's gold
imports would fall by more than two thirds to a historic low of
less than 50 tonnes this year on record bullion prices and an
increase in sales of scrap. []
Among other precious metals silver <XAG=> was bid at $17.73
against $17.65. BNP Paribas raised its fourth-quarter and 2010
silver forecasts on Friday, citing a revival in economic
activity and gains in gold.
The bank lifted its fourth-quarter silver forecast to $16.50
an ounce from $12.50, and its 2010 forecast to $15.10 from
$12.00.
Platinum <XPT=> was at $1,368 from $1,365 and palladium
<XPD=> was at $336 from $334.
(Editing by Sue Thomas)
