(Updates to TOCOM futures close)
By Chikafumi Hodo
TOKYO, Jan 21 (Reuters) - Gold dropped on Monday as the
dollar recovered to a one-month high against the euro and
uncertainties in financial markets intensified after sell-offs
in Asian stock markets.
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 0850 GMT, spot gold <XAU=> was at $873.50/874.20 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 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. []
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.
World stocks fell sharply on Monday, battered by fears of
U.S. recession and investor disappointment about a fiscal
rescue plan promoted by the U.S. administration.
[]
Japan's benchmark Nikkei average <> lost 3.86 percent
to close at a two-year low.
China's main stock index plunged 5.14 percent on Monday,
its biggest drop since early July last year, in response to
another tumble by Hong Kong share prices and companies'
announcements of heavy cash calls. []
Traders said gold prices may have entered a corrective
phase after surging to a record high of $914 an ounce on Jan.
14.
"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.
The benchmark December contract on the Tokyo Commodity
Exchange <0#JAU:> closed at 3,007 yen a gram, down 44 yen or
1.4 percent from Friday's close.
COMEX gold futures dropped in Asia after closing slightly
up in New York on Friday. The most active February contract
<GCG8> was down $7.90 or 0.9 percent at $873.80 from its New
York settlement.
Platinum <XPT=> fell to $1,547.50/1,552.50 an ounce from
$1,556/$1,561 on Friday, as TOCOM platinum <0#JPL:> closed down
43 yen or 0.8 percent at 5,168 yen.
Palladium <XPD=> edged down to $366/371 an ounce from
Friday's U.S. levels of $367/372, while silver <XAG=> fell to
$15.89/15.94 an ounce from $16.14/16.19 late in New York.
Precious metals prices at 0850 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 873.10 -11.10 -1.26 4.85
Spot Silver 15.92 -0.23 -1.42 7.79
Spot Platinum 1547.50 -9.00 -0.58 1.81
Spot Palladium 366.00 -3.00 -0.81 -0.54
TOCOM Gold 3007.00 -44.00 -1.44 -1.73
83638
TOCOM Platinum 5168.00 -43.00 -0.83 -3.20
37874
TOCOM Silver 546.50 -2.50 -0.46 1.02
1567
TOCOM Palladium 1272.00 -13.00 -1.01 -5.85
382
Euro/Dollar 1.4494
Dollar/Yen 106.11
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)
