* Gold may retrace to $1,320-technicals
* Coming Up: U.S. Chicago PMI Jan; 1445 GMT
(Adds quotes, details)
By Lewa Pardomuan
SINGAPORE, Jan 31 (Reuters) - Gold edged up on Monday,
extending gains seen in the previous session as buying continued
on fears the unrest in Egypt will spread across the Middle East,
but selling in the physical side and a drop in ETF holdings to
an eight-month low capped gains.
Silver was at a 1-week high, tracking gold which notched up
its biggest gain in eight weeks on Friday. The world's largest
gold-backed exchange-traded fund, SPDR Gold Trust , said
its holdings slipped to 1,224.118 tonnes by Jan. 28, its lowest
since May of last year.
Spot gold rose $1.10 to $1,339.40 an ounce by 0321.
Gold dropped to as low as $1,308 on Friday, its weakest since
early October 2010, before reversing losses on safe haven buying
related to the chaos in Egypt.
"We need to see the holdings in the ETF increase again
before we can see gold prices start to head up and make a new
high. ETF in itself is a reflection of a longer-term demand for
gold," said Ong Yi Ling, investment analyst at Phillip Futures
in Singapore.
"The ETF is decreasing due to the optimism in the U.S.
economy. If we see concerns on unemployment coming back to haunt
us, then perhaps we could see the ETF holding start to increase
again."
U.S. gold futures for February fell $1.4 an ounce to
$1,339.30 an ounce, having ended up nearly 2 percent on Friday.
Stocks tumbled and Brent crude futures climbed to a 28-month
high near $100 a barrel as fears of unrest throughout the Middle
East and choking energy prices sparked by deadly protests in
Egypt sent investors rushing to reduce risk.
Egyptian protesters were camped out in central Cairo on
Monday and vowed to stay until they had toppled President Hosni
Mubarak, whose fate appeared to hang on the military as pressure
mounted from the street and abroad.
Spot gold is expected to temporarily end the rebound around
$1,348 and retrace to $1,320 as the sharp surge on Friday is
regarded as part of a wave (4) correction, according to Wang
Tao, a Reuters market analyst for commodities and energy
technicals.
In the physical market, dealers noted selling at around
$1,345 an ounce in Singapore but any price dips also attracted
buying in Hong Kong, a centre for gold trading in East Asia.
"There's a bit of short covering but China is out of the
market after prices jumped more than $20 last week," said a
dealer in Hong Kong.
"I think the problem in Egypt could be resolved soon. If the
U.S. is doing something, it will be solved. You can't have so
much violence in so many days. But I think people will still
want to buy gold on dips."
President Barack Obama on Sunday urged an "orderly
transition" to democracy in Egypt, stopping short of calling on
President Hosni Mubarak to step down but signaling that his days
may be numbered.
Precious metals prices 0321 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1339.40 1.10 +0.08 -5.64
Spot Silver 28.11 0.20 +0.72 -8.91
Spot Platinum 1793.99 1.49 +0.08 1.50
Spot Palladium 811.47 -2.03 -0.25 1.50
TOCOM Gold 3548.00 44.00 +1.26 -4.85 45828
TOCOM Platinum 4788.00 30.00 +0.63 1.96 8331
TOCOM Silver 74.30 3.50 +4.94 -8.27 1725
TOCOM Palladium 2147.00 23.00 +1.08 2.38 302
Euro/Dollar 1.3602
Dollar/Yen 82.03
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Himani Sarkar)
Reuters Terminal users can see related news and prices by
double clicking on the codes in brackets:
- All precious metals headlines
- Precious metals market reports
- Daily fixing headlines
- Technical analysis
- Indian gold reports
- European gold prices <0#PREC>
- London interbank gold forward rates <0#GOFO=>
- London silver forwards
- Gold lease rates <0#LGLR=>
- London Bullion Market Association
- New York Comex gold <0#GC:> and silver <0#SI:>
- New York platinum <0#PL:> and palladium <0#PA:>
- Asian gold prices <0#PREC>
- Australian precious metals prices <0#AUPREC=>
- Shanghai Gold Exchange prices
- Hong Kong gold exchange prices
- Hong Kong bullion prices
- Indian bullion prices <0#PREC-IN>
- Japanese producer prices
For Related News and other topics, double click on one of these
codes:
SPEED GUIDES
