(Updates to late afternoon)
By Chikafumi Hodo
TOKYO, Jan 21 (Reuters) - Gold edged down on Monday as the
dollar recovered to a one-month high against the euro, with
continued falls from a record high last week adding to a
deteriorating technical trend.
President George W. Bush's plan to give the U.S. economy
temporary tax cuts and other measures totalling about $150
billion failed to remove uncertainties in financial markets,
which also made players reluctant to take new positions in
gold.
As of 0650 GMT, spot gold <XAU=> was at $879.80/880.50 an
ounce, down from $881.90/882.60 in New York on Friday.
"Gold is pressured as the euro dropped against the dollar.
The market is also reluctant to take new positions in gold due
to uncertainties in financial markets, especially as stock
prices were falling," said Shuji Sugata, manager at Mitsubishi
Corp Futures and Securities in Tokyo.
"The spot price has been supported around $880, possibly by
buying from Asian players, but it doesn't look that there is a
strong support at the level."
The dollar rose broadly and hit a one-month high against
the euro on Monday as investors fretted whether major economies
would be able to decouple from the slowing U.S. economy.
The euro was hit by short covering in the dollar and slid
to a four-month low against the yen, hurt by ongoing concerns
that euro zone economies may weaken more than expected this
year. []
Traders said gold prices may have entered a corrective
phase after surging to a record high of $914 an ounce on Jan.
14.
Gold's drop from this level 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.
"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."
Spot gold was capped at the five-day moving average of
around $882 and the 10-day average of around $886.
Traders said the market's focus will be on a U.S. Federal
Reserve meeting on Jan. 29-30.
The benchmark December contract on the Tokyo Commodity
Exchange <0#JAU:> was trading at 3,043 yen a gram, down 8 yen
or 0.3 percent from Friday's close.
COMEX gold futures edged down in Asia after closing
slightly higher in New York on Friday. The most active February
contract <GCG8> was down $0.90 or 0.1 percent at $880.80 from
its New York settlement.
Platinum <XPT=> rose to $1,560.50/1,565.50 an ounce from
$1,556/$1,561 on Friday, as TOCOM platinum <0#JPL:> advanced on
short covering after losing 4 percent last week.
The key TOCOM platinum contract rose 26 yen or 0.5 percent
to 5,237 yen a gram.
Palladium <XPD=> edged up to $369/374 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 0651 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 880.00 -4.20 -0.48 5.68
Spot Silver 16.06 -0.09 -0.56 8.73
Spot Platinum 1560.00 3.50 +0.22 2.63
Spot Palladium 369.00 0.00 +0.00 0.27
TOCOM Gold 3043.00 -8.00 -0.26 -0.56
52604
TOCOM Platinum 5238.00 27.00 +0.52 -1.89
25879
TOCOM Silver 554.30 5.30 +0.97 2.46
1137
TOCOM Palladium 1285.00 0.00 +0.00 -4.89
244
Euro/Dollar 1.4534
Dollar/Yen 106.55
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 Michael Urquhart)
