(Adds closing in Tokyo)
By Lewa Pardomuan
SINGAPORE, Feb 6 (Reuters) - Gold bounced on Wednesday
after a drop to its lowest in almost two weeks attracted
bargain hunters, while platinum also rebounded, holding near an
all-time high around $1,800 an ounce.
Spot gold <XAU=> rose to $887.50/888.20 an ounce from
$886.85/887.55 late in New York. The metal hit a low of $885.30
on Tuesday on a firmer dollar and also after a slide in global
shares forced some investors to sell gold to cover losses.
"Gold is still trading between $880 and $905. Just for
today," said William Kwan, a dealer at Phillip Futures in
Singapore.
"Short-term market participants have decided to liquidate
their gold holdings before the Chinese New Year. They prefer
not to have any outright position over the long weekend," said
Kwan.
Gold rallied to a record high of $936.50 an ounce on Feb. 1
amid worries about U.S. economic growth before a rebounding
dollar sparked heavy selling to as low as $904.70 on the same
day. It had surged more than 30 percent in 2007 and has risen
as much as 12 percent so far this year.
The physical sector in Asia saw purchases from retail
investors and jewellers at lower levels, which helped gold defy
pressure from weak stock markets and a firmer dollar.
Charts also showed the metal was in an oversold territory,
with gold's 14-day relative strength indicator (RSI) standing
at 38.78 on Tuesday, down from 55.28 last Friday. The market
views an RSI of 30 or less as oversold and 70 or more as
overbought.
"Some consolidation will happen in the next two days. I
would expect gold to be supported around $880 to $885," said
Louis Lok, a dealer at Bank of China in Hong Kong.
"This morning, we saw a little bit of buying interest in
Hong Kong."
Japanese stocks <> tumbled more than 4 percent on
Wednesday after the Dow Jones Industrial Average <> fell
2.9 percent, its biggest drop in nearly a year, amid growing
fears of a U.S. recession.
The euro hardly changed from $1.4640 <EUR=>, pulling
further away from its record high of $1.4968 reached in
November.
"Overall, the sentiment for precious metals is still
bullish," said Kwan of Phillip Futures.
"People are still looking for an opportunity to invest in
gold. That is why whenever you see any dips in gold, you can
expect firm support and buying interest coming back from gold
investors who have been staying on the sidelines."
Platinum <XPT=> rose to $1,776/1,783 from $1,770/1,775 late
in New York. It roared to a record high of $1,809 on Tuesday on
supply concerns in South Africa before heavy profit-taking
kicked in.
South Africa's government appealed to mining firms for help
in cutting power consumption on Tuesday to ease a power crisis
caused by the failure of electricity generation to match
economic growth. []
In industry news, BHP Billiton Ltd/Plc <BHP.AX> launched a
hostile $147.4 billion bid for mining rival Rio Tinto Ltd/Plc
<RIO.AX> in a move that could trigger a Chinese-led counterbid
in the world's second-biggest corporate takeover.
[]
The benchmark December platinum futures contract <0#JPL:>
on the Tokyo Commodity Exchange ended 72 yen per gram higher at
5,831 yen but off Tuesday's record high of 5,938 yen.
Palladium <XPD=> rose to $415.00/419.00 an ounce from
$411.00/415.00 an ounce but was off Tuesday's six-year high of
$427 an ounce.
COMEX's April gold futures <GCJ8> rose $2.6 an ounce to
$892.9 an ounce.
Silver <XAG=> fell to $16.25/16.30 an ounce from
$16.32/16.37 in New York.
Precious metals prices at 0833 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 888.00 1.15 +0.13 6.64
Spot Silver 16.27 -0.06 -0.37 10.16
Spot Platinum 1776.00 6.00 +0.34 16.84
Spot Palladium 412.00 1.00 +0.24 11.96
TOCOM Gold 3057.00 -50.00 -1.61 -0.10
102167
TOCOM Platinum 5831.00 72.00 +1.25 9.22
52627
TOCOM Silver 559.60 -13.50 -2.36 3.44
1457
TOCOM Palladium 1434.00 -29.00 -1.98 6.14
2149
Euro/Dollar 1.4612
Dollar/Yen 106.38
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)
