(Updates prices)
SINGAPORE, Jan 16 (Reuters) - Gold slipped on Wednesday
after a failure to hit a new record high the previous day
triggered selling from investors, but a struggling U.S. dollar
and buying on dips by jewellers could help the metal regain
$900 soon.
"Of course the market still looks bullish. There's a little
bit of demand from China. There's a bit of buying interest
below $900," said Ronald Leung, director of Cheong Gold Dealers
in Hong Kong.
Spot gold <XAU=> fell to $897.00/898.00 an ounce from
$899.50/900.20 late in New York, where it dropped nearly $3 in
volatile trade amid fears the credit market crisis could take a
toll on global growth.
Leung expected gold to trade in a wide range of $890 to
$920 this week. "There are too many bulls in the market," he
said.
Gold rallied to $913.80 on Tuesday, just below a record
high of $914 hit earlier this week, before taking a breather.
But a drop below $900 attracted purchases from bargain
hunters in Asia, said dealers, adding that jewellery makers in
China were also stocking up ahead of the Lunar New year in
early February.
All eyes were on the financial markets, where speculation
was rife that there would be a U.S. Federal Reserve interest
rate cut between its regular policy meetings. There was talk
the Fed was holding an emergency meeting to cut rates
immediately.
A rate cut will boost gold's appeal as an alternative
investment.
"Within a few days, the gold price will go back to over
$900. Everything depends on the U.S. interest rates," said
Yukuji Sonoda, precious metals analyst at Daiichi Commodities
in Tokyo.
"The next target is $1,000. It won't take a long time to
reach $1,000," said Sonoda, adding that near record high crude
oil <CLc1> also elevated the metal's role as hedge against
inflation.
The dollar hit a 2-1/2-year trough of 106.59 on electronic
trading platform EBS, the lowest since June 2005, as investors
dumped riskier assets after weak retail sales figures and poor
bank earnings fuelled fears of a U.S. recession.
The euro was steady at $1.4805 <EUR=>, off a seven-week
peak of $1.4923 hit the previous day and a record high of
$1.4969 struck in November.
A strong yen sparked selling in Tokyo futures. The key gold
futures contract for December 2008 delivery <0#JAU:> on the
Tokyo Commodity Exchange (TOCOM) ended the morning session 60
yen per gram lower at 3,104 yen.
COMEX gold futures fell after hitting another record high
on Tuesday. The most active February contract <GCG8> fell $4.2
an ounce to $898.4 an ounce.
Platinum <XPT=> fell to $1,569/1,574 an ounce from
$1,571/1,576 an ounce late in New York and off Monday's record
high of $1,590.50 ounce.
Silver <XAG=> fell to $16.07/16.12 an ounce from
$16.10/16.15 late in New York.
Palladium <XPD=> dropped to $376.50/381.50 an ounce from
$378/383.
Precious metals prices at 0216 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 897.25 2.75 +0.31 7.75
Spot Silver 16.07 -0.03 -0.19 8.80
Spot Platinum 1569.00 0.50 +0.03 3.22
Spot Palladium 376.50 -1.50 -0.40 2.31
TOCOM Gold 3104.00 -60.00 -1.90 1.44
47396
TOCOM Platinum 5305.00 -66.00 -1.23 -0.64
16113
TOCOM Silver 555.20 -16.60 -2.90 2.62
1216
TOCOM Palladium 1318.00 -10.00 -0.75 -2.44
604
Euro/Dollar 1.4821
Dollar/Yen 106.73
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Michael Urquhart)
