* Gold extends losses on firm dollar, stocks
* India's January gold imports dive over 90 pct
* U.S. Federal Reserve keeps interest rates near zero
* Nikkei up 1.6 pct, oil slips to around $42 a barrel
(Updates prices, adds India's January gold imports)
By Lewa Pardomuan
SINGAPORE, Jan 29 (Reuters) - Gold extended losses to trade
below $900 an ounce on Thursday, after registering its biggest
daily percentage drop in more than two weeks the previous day,
as stock markets rallied and the U.S. Fed calmed inflation
fears.
Bullion's Monday rally to a three-month high above $900 had
also spurred selling in the physical market, with dealers
reporting an increase in the supply of scrap in Southeast Asia
and also India, the world's main gold consumer.
India's gold imports plunged more than 90 percent to just
1.2 tonnes in January 2009, from 18tonnes at the same month
last year, due to high prices and amplestocks, the Bombay
Bullion Association said. []
"I think that's probably the fact that's weighing on the
gold price at the moment," said David Moore, commodities
strategist at Commonwealth Bank of Australia in Sydney.
"I would have thought you might have seen gold a little bit
better supported still by investor interest," said Moore, who
expects gold to trade at $875 by the end of March and $890 by
end-June.
Gold <XAU=> was trading at $882.85 an ounce, down $2.75
from New York's notional close on Wednesday, when it hit an
intraday high of $902.90 before falling as low as $879.10.
Gold was below a three-month high of $915.30 hit on Jan.
26, but it has bounced around 10 percent since falling to a
1-month low around $801 hit two weeks ago as investors sought
safe-haven assets amid turmoil in the financial markets.
The dollar firmed against the yen after the Fed kept
interest rates near zero and said it was prepared to buy
long-term Treasury debt if that would help improve credit
conditions. The euro slipped to $1.3123. []
Japan's Nikkei average climbed 1 percent, boosted by
exporters such as Honda Motor <7267.T> on a softer yen, while
financial shares jumped amid optimism about the U.S.
government's rescue plan for banks. []
U.S. President Barack Obama's economic stimulus plan,
possible creation of a government "bad bank" to absorb toxic
assets and Fed readiness to buy long-term bonds all gave hope
of forceful U.S. action soon to help ease the global financial
crisis. []
"I will have to say that when we approach the $900s, the
physical players are coming in to sell," said a dealer in
Singapore. "But the recent decline still looks OK. The
longer-term uptrend is still intact."
"The $880-region should provide good support, and the next
support will probably come in around $860.So basically, this
current correction is not alarming, I guess, as long as we hold
above $860," said the dealer, referring to two highs seen this
month.
Oil <CLc1> slipped to around $41 a barrel. []
Platinum <XPT=> was trading at $943.50 an ounce, down
$10.00 from New York's notional close.
New York gold futures <GCZ9> fell $4.5 an ounce to $883.6
in electronic trade.
Precious metals prices at 0509 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 882.85 -2.75 -0.31 6.02
Spot Silver 11.90 -0.05 -0.42 -19.43
Spot Platinum 943.50 -10.00 -1.05 -37.93
Spot Palladium 186.00 -2.00 -1.06 -49.46
TOCOM Gold 2559.00 -24.00 -0.93 -16.37
26386
TOCOM Platinum 2727.00 -13.00 -0.47 -48.92
5607
TOCOM Silver 340.40 -0.70 -0.21 -37.08
636
TOCOM Palladium 542.00 -6.00 -1.09 -59.88
131
Euro/Dollar 1.3114
Dollar/Yen 89.84
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)
