(Updates prices to afternoon)
By Lewa Pardomuan
SINGAPORE, June 5 (Reuters) - Gold prices recoiled on
Thursday as some investors ditched the precious metal after the
dollar held on to gains against other currencies and oil
dropped on worries about falling demand.
Gold <XAU=> dipped to $875.95/876.95 an ounce from
$878.30/879.70 an ounce late in New York on Wednesday -- within
sight of a two-week low of $870 hit on May 30.
"I would expect the U.S. dollar to have some strong support
in the near term. The market will try to test the bottom around
$860," said Louis Lok, a dealer at Bank of China in Hong Kong.
The dollar extended gains against the euro and other major
currencies after Federal Reserve chief Ben Bernanke emphasised
inflation concerns, yet another sign the central bank is likely
done cutting rates. <USD/>
Oil fell, adding to the past two sessions' $5 loss, as
India and Malaysia's decisions to raise fuel costs, together
with weaker U.S. consumption, heightened worries about falling
oil demand. <O/R>.
But lower gold prices attracted buying from jewellery
makers and other bargain hunters, although trading was slow
ahead of Friday's U.S. non-farm payrolls data, which may set
the direction for the dollar and precious metals.
"If there's any adverse result from the non-farm payrolls
data, the stock market may come off and there might be some
inflows of buying interest back to safe havens," William Kwan,
bullion director of Gold Capital Management.
Gold powered to a record high of $1,030.80 an ounce in
mid-March on expectations of more rate cuts in the United
States which lifted its appeal as an alternative investment and
record high oil prices that raised fears of inflation.
Prices have since corrected as investors booked profits.
"When everyone has exited the market and the price is at
the lower range, what will they do next? asked Kwan.
"They will come back, especially when the fundamentals are
still quite well intact for precious metals and there's
expectation the U.S. is technically in a recession. People will
come back," said Kwan, who pegged support at $870 an ounce.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange fell $3.9 an ounce to
$879.9.
The most active Tokyo platinum contract for April 2009
delivery <0#JPL:> on the Tokyo Commodity Exchange fell 6 yen
per gram to 6,605 yen per gram, having earlier hit a low of
6,565 yen.
Spot platinum <XPT=> fell to $1,979/1,999 an ounce from
$1,985/2,005 an ounce late in New York.
Silver <XAG=> edged down to $16.74/16.81 an ounce from
$16.81/16.87 an ounce. Spot palladium <XPD=> rose to
$427.00/432.00 an ounce, from $425.00/433.00 an ounce.
Precious metals prices at 0351 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 875.85 -1.80 -0.21 5.18
Spot Silver 16.73 -0.05 -0.30 13.27
Spot Platinum 1979.00 -4.00 -0.20 30.20
Spot Palladium 427.00 4.00 +0.95 16.03
TOCOM Gold 2996.00 5.00 +0.17 -2.09
14015
TOCOM Platinum 6605.00 -6.00 -0.09 23.71
9418
TOCOM Silver 574.20 4.70 +0.83 6.14
172
TOCOM Palladium 1481.00 -2.00 -0.13 9.62
161
Euro/Dollar 1.5393
Dollar/Yen 105.48
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)
