* Under pressure from dlr, caution before US rate decision
* SPDR Gold holdings unchanged since Jan 19 at 1,111.922 T
By Chikako Mogi
TOKYO, Jan 26 (Reuters) - Gold wiped out its earlier gains
to fall below $1,100 an ounce on Tuesday as a firming dollar
triggered a wave of fund selling, but key events including a
U.S. interest rate decision later in the week kept investors
cautious.
The dollar was buoyed after news that China had implemented
a previously ordered rise in some banks' reserve requirements,
helping investors become risk averse. []
But gold stayed well above a near five-week low of $1,081.90
hit on Friday, when news of President Barack Obama's proposal to
limit financial risk-taking hit the broader commodities markets.
Retail demand for the precious metal was solid, particularly
from China, at a level below $1,100 per ounce, said Koichiro
Kamei, managing director at financial research firm Market
Strategy Institute in Tokyo.
"Signs of tightening in China have fuelled fears that demand
in commodities would be hit and caused repercussions in
financial markets. That is happening again on the news about
Chinese banks today," Kamei said.
"But regardless of tightening affecting the financial
sector, retail demand in China for investment and jewellery
picks up on price dips. Also, there is seasonal demand as the
Chinese New Year is approaching," he added.
Spot gold <XAU=> fell 0.4 percent to $1,093.35 per ounce as
of 0628 GMT after reversing earlier gains to a high of
$1,103.15, compared to New York's notional close of $1,097.95.
U.S. gold futures for February delivery <GCG0> fell 0.2
percent to $1,093.10, compared to Monday's close at $1,095.70 on
the COMEX division of the New York Mercantile Exchange.
The market was basically waiting for key events such as the
Federal Reserve's rate decision and the State of the Union
address by President Obama, both on Wednesday, as well as
Tuesday's U.S. S&P/Case-Shiller home price index for November.
"The market does not have much interest (in activity) ahead
of the Fed rate decision," said Louis Lok, a senior dealer at
Bank of China in Hong Kong, adding that gold prices were likely
to stay in ranges between $1,085 and $1,110 until the rate
outcome.
After wide-ranging trade last week and a correction from
gold's high prices, some physical buying has been cited this
week, he said.
Coming under pressure from gold entering into negative
territory, spot platinum <XPT=> fell 1.5 percent to $1,524 per
ounce. Spot palladium <XPD=> was down 1.6 percent at $433.75.
Platinum and palladium, valued for their use in automobile
catalytic converters, had been rising and hit multi-month highs
last week on strong demand for U.S.-based exchange-traded funds
backed by the metals launched earlier this month.
Holdings of ETF Securities' U.S.-based platinum
exchange-traded fund <PPLTiv.P> rose 10 percent on Friday, while
those of its U.S. palladium product <PALLiv.P> climbed by a
third, the company said on Monday. []
In contrast, the holdings at the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust <GLD>, have been unchanged
since Jan. 19 at 1,111.922 tonnes as of Jan. 25. []
Precious metals prices at 0642 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1092.70 -5.25 -0.48 -0.27
Spot Silver 16.91 -0.21 -1.23 0.48
Spot Platinum 1523.50 -23.00 -1.49 3.85
Spot Palladium 432.00 -9.00 -2.04 6.54
TOCOM Gold 3162.00 -45.00 -1.40 -2.98 81501
TOCOM Platinum 4363.00 -140.00 -3.11 -0.41 29357
TOCOM Silver 49.30 -1.00 -1.99 -4.64 1048
TOCOM Palladium 1239.00 -27.00 -2.13 6.35 515
Euro/Dollar 1.4075
Dollar/Yen 89.59
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda)
