(Updates prices to afternoon, adds comments)
By Chikafumi Hodo
TOKYO, Jan 21 (Reuters) - Gold edged lower on Monday after
President George W. Bush's plan to give the U.S. economy
temporary tax cuts and other measures totalling about $150
billion failed to inspire buying.
Gold prices may have entered a corrective phase after
surging to a record high of $914 an ounce last week, but the
precious metal could be supported due to weakness in the dollar
and uncertainty in financial markets as stock prices slump.
As of 0257 GMT, spot gold <XAU=> was at $878.25/879.25 an
ounce, down from $881.90/882.60 in New York on Friday.
"Gold has surged to a record high in a very short period of
time and now the market could be in a corrective phase," said
Tatsuo Kageyama, an analyst at Kanetsu Asset Management in
Tokyo.
"Uncertainties are still there in the financial markets
even after the U.S. economic stimulus plan. A further slump in
stock prices could trigger profit-taking in gold."
Gold hit the record high of $914 on Jan. 14. Gold's drop
from the record high was partly driven by selling from
investors and funds to cover margin calls from losses in stock
markets amid fears of a recession in the United States.
Spot gold was capped at the five-day moving average of $882
and the 10-day average of $886.
Kageyama said important support would be around $850, which
is close to the 25-day average of $851, but gold could be
supported as physical buyers from China, India and the Middle
East are expected to emerge.
Traders said the market's focus will be on a U.S. Federal
Reserve meeting on Jan. 29-30.
Spot gold was pressured as the key distant Japanese gold
futures <0#JAU:> were weighted down.
The benchmark December contract on the Tokyo Commodity
Exchange <0#JAU:> closed the morning trade at 3,050 yen a gram,
down 1 yen from Friday's close.
COMEX gold futures fell in Asia after closing slightly
higher in New York on Friday. The most active February contract
<GCG8> was trading down $1.9 or 0.2 percent at $879.8 from its
New York settlement.
Platinum <XPT=> edged down to $1,553.50/1,558.50 an ounce
from $1,556/$1,561 on Friday.
TOCOM platinum <0#JPL:> advanced, but technical trend
stayed weak after losing 4 percent last week.
The key TOCOM platinum contract closed the morning session
down 14 yen or 0.3 percent at 5,225 yen a gram.
Palladium <XPD=> edged up to 369/373 an ounce from Friday's
U.S. levels of $367/$372, while silver <XAG=> fell to
$16.06/16.11 an ounce from $16.14/16.19 late in New York.
Precious metals prices at 0256 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 878.25 -5.95 -0.67 5.47
Spot Silver 16.06 -0.09 -0.56 8.73
Spot Platinum 1553.50 -3.00 -0.19 2.20
Spot Palladium 369.00 0.00 +0.00 0.27
TOCOM Gold 3050.00 -1.00 -0.03 -0.33
24878
TOCOM Platinum 5225.00 14.00 +0.27 -2.14
10488
TOCOM Silver 556.20 7.20 +1.31 2.81
523
TOCOM Palladium 1286.00 1.00 +0.08 -4.81
130
Euro/Dollar 1.4557
Dollar/Yen 106.70
TOCOM prices in yen per gram, except for silver which is in
yen per 10 grams, spot prices in $ per ounce.
(Reporting by Chikafumi Hodo; Editing by Ben Tan)
