(Repeats to additional subscribers)
By Sambit Mohanty
SINGAPORE, March 20 (Reuters) - Gold shed nearly 1 percent
on Friday as dealers in China and Southeast Asia booked
profits, taking advantage of bullion's rise to a near
three-week high a day earlier, but a holiday in Japan may keep
volumes thin.
As the dollar heads for its biggest weekly fall in 24 years
and holdings of the largest gold-backed exchange-traded fund
hit a record, traders said the underlying sentiment remained
strong as investors scramble for safe-haven assets.
"Some physical selling from China and Southeast Asia came
in this morning," said one Hong Kong-based trader. "They found
the price close to $960 a good level to sell a few positions."
Spot gold <XAU=> was trading at $951.60 an ounce by 0257
GMT, down from New York's notional close of $958.60. On
Thursday, gold on the spot market rose to a peak of $961.50 an
ounce, its highest since Feb. 27.
Gold is down 5 percent since hitting an 11-month high above
$1,000 an ounce in February after investors booked profits and
sales of scraps intensified as holders sold back jewellery and
coins for cash. It struck a record of $1,030.80 last March.
Bullion rose sharply on Thursday after the dollar fell
following the U.S. Federal Reserve's surprise announcement a
day earlier that it intended to buy long-dated U.S. Treasuries
along with U.S. mortgage and agency debt in a big way.
The step was the central bank's most aggressive such action
since the early 1960s. []
In addition, the SPDR Gold Trust <GLD> said its holdings
rose to a record 1,103.29 tonnes by March 19, up 18.96 tonnes,
or 1.7 percent, from the previous day. []
"The ETF trend -- successive records and that too very
frequently -- is a clear indication that the sentiment is
strong and will remain strong in the near term," said another
Hong Kong-based trader.
"Some physical selling took place but gold looks like one
of the safest assets at the moment. And the dollar weakness is
a key factor."
For a graphic on the SPDR holdings, please click on:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD200309.jpg
As investors feared the Federal Reserve's plans to buy
longer-term government debt would cheapen the world's reserve
currency, the dollar was down more than 5 percent against a
basket of major currencies <.DXY>.
U.S. gold futures for April delivery <GCJ9> were down $4.90
from the previous settlement of $958.80 an ounce on the COMEX
division of the New York Mercantile Exchange.
"The underlying bullish outlook remains firmly intact with
the past 4 weeks' major corrective phase now fully confirmed to
be complete," Newedge said in a report. "Expect values to head
back towards the February peaks in and around the $1,005-$1,010
zone in the days and weeks ahead."
In early Asian trading, the U.S. dollar index was pinned at
83.135, having fallen as far as 82.631 on Thursday the lowest
in 10 weeks. The euro <EUR=> was resting at $1.3655, having
climbed to a peak of $1.3737 in New York, the highest since
Jan. 8.
Precious metals prices at 0318 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 953.25 -5.35 -0.56 8.31
Spot Silver 13.56 -0.01 -0.07 19.79
Spot Platinum 1113.00 -9.50 -0.85 19.42
Spot Palladium 205.00 1.50 +0.74 11.11
Euro/Dollar 1.3665
Dollar/Yen 94.46
(Reporting by Sambit Mohanty)
