By Risa Maeda
TOKYO, Feb 19 (Reuters) - Gold slipped on Thursday, taking
a breather after hitting a new seven-month high in early trade,
as it consolidated gains before a widely anticipated challenge
to a fresh peak near $1,000 on safe-haven buying.
Technically, the yellow metal is overbought in the short
term, although another record in the holdings of the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
<GLD>, highlighted robust interest by investors.
Spot gold <XAU=> was trading at $977.30 an ounce by 0329
GMT, down 0.8 percent from New York's notional close on
Wednesday.
Earlier on Thursday it briefly rose as high as $985.95, its
highest since July. It is now about 4 percent below the
all-time high of $1,030.80 marked in March, when record oil and
uncertainties in the dollar's outlook spurred buying.
In other markets, the dollar stayed near a six-week high
against the yen and a three-month peak versus the euro, both
marked on Wednesday, when President Barack Obama pledged up to
$275 billion to stem U.S. home foreclosures. []
But gold has reacted little to the dollar's rally.
The precious metal has lost a traditional negative
correlation with the dollar in the past few months. Gold has
also benefited from long-term inflation worries, as many
countries are printing money to stimulate sluggish economies
and central banks have loosened credit, analysts said.
"The next target is $1,030, having cleared the high set in
October of $930," said Naomi Suzuki, an analyst at SCM
Securities in Tokyo, referring to last week's move.
"Gold is a relative choice. It is benefiting from
instability in the global economy, fears of super inflation in
the coming years and investor aversion from more complicated,
riskier assets, like hedge funds," she said.
UBS said earlier this week that global assets of hedge
funds may drop to $1.2 trillion by the end of the first
quarter, down more than 35 percent from a peak in mid-2008, as
the number of managers declines and funds rely less on
strategies that use leverage. []
In contrast, the holdings of the SPDR Gold Trust hit a
record 1,024.09 tonnes as of Feb. 18, up almost 250 tonnes in
the year to date and compared with 780 tonnes in the prior four
years since its listing in Nov. 2004. []
But there is caution about gold's future volatility.
Also, analysts say a slump in jewellery demand may weigh on
the precious metal in the long run. []
U.S. gold futures for April delivery <GCJ9> stood at $979
an ounce in electronic trade, up 0.1 percent from the previous
close on the COMEX division of the New York Mercantile
Exchange.
Precious metal prices at 0336 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 977.60 -6.90 -0.70 17.40
Spot Silver 14.25 -0.06 -0.42 -3.52
Spot Platinum 1090.00 -7.50 -0.68 -28.29
Spot Palladium 217.00 0.00 +0.00 -41.03
TOCOM Gold 2949.00 57.00 +1.97 -3.63
38103
TOCOM Platinum 3270.00 -14.00 -0.43 -38.75
7316
TOCOM Silver 426.00 6.90 +1.65 -21.26
354
TOCOM Palladium 662.00 12.00 +1.85 -51.00
212
Euro/Dollar 1.2582
Dollar/Yen 93.60
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Miho Yoshikawa; Editing by Clarence
Fernandez)
