* Dollar weaker as Obama visits China, supporting gold
* Gold rises 7 days out of past 10 sessions
* A rise to $1,150 could trigger options-related buying
* Holdings by iShares Silver hit record, SPDR Gold down
By Risa Maeda
TOKYO, Nov 16 (Reuters) - Spot gold hit a record high above
$1,130 an ounce on Monday with investors cautiously preparing for
the precious metal to advance towards the psychologically
important $1,200 level as the U.S. dollar is expected to remain
weak for now.
Investors maintained their appetite for bullion as a hedge
against currencies as the greenback drifted lower in Asia and the
euro edged up as rhetoric over China's yuan currency policy
increased. []
The United States and China sparred over exchange rates at
a meeting of Asia Pacific leaders on Sunday, a move that
quashed expectations that China may allow the yuan scope to rise
in coordination with U.S. President Barack Obama's first trip to
Beijing. [] []
Spot gold <XAU=> was at $1,128.20 an ounce at 0624 GMT, up
0.9 percent from New York's notional close of $1,118.50. It
earlier rose as high as $1,130.25, an all-time high.
Gold has pierced record highs for 7 days out of the past 10
sessions, during which it has risen more than 6 percent. The
previous record was $1,122.85 marked on Thursday.
U.S. gold futures for December delivery <GCZ9> stood at
$1,129.20 an ounce, up 1.1 percent from Friday's settlement. The
contract had reached a new record high of $1,130.60.
The current uptrend looks sustainable because the market has
not felt the "real euphoria" of a daily price jump of more than 3
percent, said Koichiro Kamei, managing director at financial
research firm Market Strategy Institute in Tokyo
"The yellow light has been on but no red light has been seen
on the current course to the $1,200 target since gold broke
through above $1,000 in September," he said.
Volatility in gold prices is expected to stay relatively high
in coming days as substantial amounts of open positions remain in
U.S. December gold futures call options with a strike price of
$1,200, whose expiry is due next week.
Buying call options has been one strategy for gaining
exposure to gold.
A rise above $1,150 in U.S. gold futures could bolster
further options-related buying, analysts said.
Yuichi Ikemizu, Tokyo branch manager for Standard Bank, said
buy orders placed soon after Asia's opening for December gold
futures at $1,127.90 per ounce were in substantial lots.
"The existence of bullish players who bought in such an
aggressive manner itself showed how strong the market's momentum
is," he said.
News on Monday that commodities funds manager Blackrock
Investment <BLK.N> expected central banks to be net gold buyers
in 2009 also helped gold's rise, now that the precious metal is
more sensitive to bullish news than bearish news, traders said.
[]
Focus is also on how strong scrap gold selling was in the
last quarter in an industry report by the World Gold Council due
later this week as gold now has fewer sellers, Market Strategy
Institute's Kamei said.
"If the Gold Demand Trends report shows a drop in scrap
selling in July-September from the previous quarter, that would
be a surprise and further push up the market," Kamei said.
In the currency market, the dollar index <.DXY> <=USD>
fell 0.4 percent to 75.042. It had fallen on Friday after data
showed a wider U.S. trade deficit and weaker consumer sentiment.
The dollar was slightly softer against the yen <JPY=> after
data showed the Japanese economy grew 1.2 percent in the third
quarter, nearly double forecasts, but that was partly due to
stimulus that the previous government enacted.
Underlining views that a global economic imbalance is being
reflected in the weakening dollar, the head of the International
Monetary Fund said a stronger Chinese yuan is part of the reforms
that Beijing needs to implement to increase domestic consumption.
[]
Spot platinum <XPT=> tracked gold's gains and rose 0.8
percent to $1,401.50 an ounce from New York's notional close of
$1,390. It earlier hit a 14-month high of $1,403.50.
On Friday platinum broke through above $1,390 for the first
time since September 2008 after news that South Africa's Impala
Platinum Holdings <IMPJ.J> forecast output from Rustenburg, its
main mining area, would fall by 100,000 ounces this financial
year to 850,000 ounces, due to closures over safety and a
two-week strike. []
Impala Platinum is the world's No. 2 producer of the metal
used to clean vehicle exhaust fumes and make jewellery.
Spot silver <XAG=> was up 1.3 percent at $17.62 per ounce.
Underling the metal's firmness, holdings by the world's
largest silver-backed exchange-traded fund hit record levels for
the second straight day on Friday.
The iShares Silver Trust <SLV> said its bullion holdings rose
30.56 tonnes, or 0.3 percent, to a record 8,954.08 tonnes as of
Nov. 13 from the previous business day. []
But interest from long-term investors in gold-backed
securities was relatively low.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings fell 0.61 tonnes to
1,113.833 tonnes on Friday. []
This marked the first fall since Nov. 5.
Precious metals prices at 0628 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1128.30 9.80 +0.88 28.19
Spot Silver 17.64 0.23 +1.32 55.83
Spot Platinum 1404.50 14.50 +1.04 50.70
Spot Palladium 360.00 6.50 +1.84 95.12
TOCOM Gold 3261.00 39.00 +1.21 26.74 62527
TOCOM Platinum 4058.00 110.00 +2.79 53.02 17482
TOCOM Silver 508.70 6.50 +1.29 59.32 283
TOCOM Palladium 1053.00 37.00 +3.64 91.45 582
Euro/Dollar 1.4967
Dollar/Yen 89.54
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Joseph Radford)
