* Gold pressured after G20 plan to ask IMF to sell gold
* Global stocks rally, optimism diminish safe-haven demand
* ECB cuts rates by smaller-than-expected 25 bps
(Recasts, updates with quotes, closing prices, adds NEW
YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 2 (Reuters) - Gold ended lower on
Thursday, falling below $900 an ounce due to renewed talk of
gold sales by the International Monetary Fund and reduced
safe-haven demand as Wall Street rallied.
Spot gold <XAU=> slid more than 3 percent to a two-week low
of $893.70 an ounce. It was at $903.30 an ounce at 3:04 p.m.
EDT (1904 GMT), down 2.5 percent from its last quote $926.40
late in New York on Wednesday.
U.S. gold for June delivery <GCM9> settled down $18.80, or
2.0 percent, at $908.90 on the COMEX division of the New York
Mercantile Exchange.
British Prime Minister Gordon Brown said the G20 countries
will ask the International Monetary Fund to bring forward gold
sales to finance help for poorest countries. []
The G20 summit will discuss the prospect of gold sales by
the International Monetary Fund. The IMF has already said it
intends to sell 403 tonnes of gold, but the decision is
awaiting the approval of the U.S. Congress.
"Clearly, just the fact that U.S. Congress has to be
involved implies that this is not going to be an immediate
action on the part of the IMF," said Brian Hicks, a portfolio
manager at U.S. Global Investors, which manages $2 billion
assets.
One precious metals analyst said that the gold market can
easily accommodate hefty sales, given that gold sales to date
this year under the Central Bank Gold Agreement have been very
low.
A strong rally in global stocks showed that some investors
were switching out of gold and back to shares.
"Equity markets have bottomed and I think gold will
therefore suffer from here," said Citigroup analyst David
Thurtell.
Gold mining stocks took a big hit on sharply lower bullion
prices. The Gold Bugs index <.HUI> tumbled 5 percent.
U.S. Global's Hicks said that lower gold stocks should be
seen as a buying opportunity as gold mining companies should
outperform physical gold bullion due to margin expansion as a
result of higher price of the metals and lower costs.
ECB RATE CUT
On the currency markets, the euro extended gains against
the dollar after the European Central Bank said it is cutting
its refinancing rate by 25 basis points to 1.25 percent.
[]
The ECB will decide on whether to take further nonstandard
steps in its monetary policy at its next meeting in May, the
bank's president Jean-Claude Trichet said. []
A weaker dollar typically benefits gold, which is often
bought as an alternative asset to the currency. However, the
impact of currencies on the metal are being outweighed by other
factors, such as risk aversion.
The markets are also awaiting key U.S. nonfarm payrolls
data on Friday for fresh impetus, traders said.
Among other precious metals, platinum group metals turned
higher, showing little reaction to a smaller-than-expected 37
percent drop in U.S. auto sales in March. []
The metal, which is primarily used as a component in
catalytic converters, shed nearly two-thirds of its value last
year after hitting a record high in March, as the global
slowdown battered the car industry.
Spot platinum <XPT=> was at $1,151.50 an ounce, up 1.5
percent from its previous close of $1,133.50, while spot
palladium <XPD=> traded at $221.50 an ounce, up 1.6 percent
from its previous finish of $218.
Spot silver <XAG=> was at $12.95 an ounce, down 0.5 percent
from its previous finish $13.01, taking its cue from gold.
(Reporting by Frank Tang and Jan Harvey; Editing by Marguerita
Choy)
