(Updates prices, adds activity in physical market)
By Lewa Pardomuan
SINGAPORE, Feb 26 (Reuters) - Gold extended losses on
Tuesday after the U.S. Treasury said it would support gold
sales by the International Monetary Fund, which holds more than
3,000 tonnes of bullion.
But the physical market was abuzz with activity as gold's
fall attracted bargain hunters as well as purchases from
jewellery makers, mainly from Indonesia and Vietnam.
Gold <XAU=> dropped to $930.20/931.00 an ounce from
$937.80/938.60 an ounce late in New York on Monday, but
remained within sight of last week's record high of $953.60 an
ounce.
"In my opinion, the IMF gold sales will not push the price
of gold down, but psychologically, it might," said William
Kwan, a dealer at Phillip Futures in Singapore.
The U.S. Treasury had resisted seeking congressional
approval for the gold sales until the move was tied to an IMF
cost-cutting plan, and has enough votes in the Fund to block
any sales.
The IMF is the world's third-largest gold holder, with
3,217.3 tonnes tonnes of bullion reserves. The last IMF gold
sales in December 1999 and April 2000 were not put through the
spot markets.
"IMF gold sales will not flow into the physical market. It
only transits from one central bank to another. That's all,"
said Kwan.
Any sale of IMF gold would also be done in accordance with
a European central bank gold accord, which limits total gold
sales to 500 tonnes a year.
"Jewellers have come back to buy, although I think volumes
are not great. I think they are waiting for the price to test
$920 before buying more," said a dealer in Singapore.
Gold bars were on par with spot London prices in Singapore,
unchanged from last week <GOLD/ASIA1>.
"If there's no follow through on the downside for gold, I
think it's a good chance for investors and small speculators to
buy on margins," said Kwan of Phillip Futures.
"The upside is still $950. Once it's broken, I can tell you
gold could see $1,000," he said.
The dollar was steady at 108.05 yen <JPY=>, while the euro
was little changed at $1.4825 <EUR=>, near a three-week high of
$1.4863 struck on electronic trading platform EBS on Friday.
"Gold bulls have the solid near-term technical advantage
and are looking for more on the upside in the near term," said
Pradeep Unni, an analyst at Vision Commodities in Dubai.
"$950 is more of a psychological resistance, which could be
easily taken out in the coming days," he said.
Platinum retreated as investors booked profit from last
week's record high, palladium was below a 6-1/2-year high and
silver held near its best level in 27 years.
Spot platinum <XPT=> fell to $2,125/2,132 an ounce from
$2,135/2,145 an ounce and was off last week's record high of
$2,192 an ounce.
Japanese platinum futures were also off record highs. The
most active December contract <0#JPL:> on the Tokyo Commodity
Exchange fell 83 yen per gram lower to 7,106 yen.
Palladium <XPD=> fell to $513.00/518.00 an ounce from
$520/525 an ounce late in New York.
Silver <XAG=> edged down to $18.04/18.09 an ounce from
$18.07/18.12 an ounce -- not far from a 27-year peak of $18.15
hit on Monday.
Precious metals prices at 0406 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 930.40 -9.20 -0.98 11.73
Spot Silver 18.04 -0.03 -0.17 22.14
Spot Platinum 2122.00 -13.00 -0.61 39.61
Spot Palladium 513.00 -7.00 -1.35 39.40
TOCOM Gold 3245.00 -46.00 -1.40 6.05
45343
TOCOM Platinum 7105.00 -84.00 -1.17 33.08
11011
TOCOM Silver 630.70 1.60 +0.25 16.58
1435
TOCOM Palladium 1809.00 -13.00 -0.71 33.90
10071
Euro/Dollar 1.4828
Dollar/Yen 107.84
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
