* IMF sells 200 tonnes of gold to India's central bank
* Buying also speeds on producer buyback potential
* SPDR gold holdings unchanged at 1,103.519 T
* Market de-couples from dollar
(Adds quotes, updates prices)
By Veronica Brown and Michael Taylor
LONDON, Nov 3 (Reuters) - Gold swept to a record high above
$1,080 per ounce on Tuesday, defying dollar strength as the
International Monetary Fund's 200 tonne sale of gold to India's
central bank boosted sentiment toward the metal.
Spot gold <XAU=> stood at $1,077.15 per ounce at 1645 GMT,
up 1.7 percent from $1,059.15 quoted late in New York on Monday.
Earlier, gold hit a historic high of $1,080.60.
U.S. gold futures also hit a record $1,081.70 an ounce
<GCZ9>.
The IMF said on Monday it had sold 200 tonnes of gold to
India for $6.7 billion. Although an IMF gold sale had been
flagged for some time, it lifted some uncertainty from the
market by helping soak up potential supply. []
"The market is managing to decouple from the dollar on the
news from the IMF -- which begs the question: they've sold half
of the 400 tonnes they have in this off-market transaction, will
be they able to sell the balance to other central banks?" said
Robin Bhar, metals analyst at Calyon.
"I think the market is hoping that another announcement will
be made for the balance," he added.
The IMF sale, part of an agreement to sell about an eighth
of the Fund's stock, fuelled speculation that other governments
-- including Beijing -- may be ready to diversify their reserves
even at near record prices.
"It's a rumour but I'd say where there is smoke there is
also some fire," said Commerzbank analyst Eugen Weinberg.
U.S. traders also said the gold market was finding support
from potential for accelerated producer buybacks in as miners
are keen to back gold they had previously sold forward.
Miners Anglogold Ashanti <ANGJ.J> and Barrick gold <ABX.TO>
both told Reuters on Monday that closure of their hedgebooks
might happen ahead of schedule.
AngloGold Ashanti said it may accelerate closing its
hedgebook if conditions are right. [], while
Barrick, the world's biggest miner of the precious metal, said
it may complete the planned closure of its hedgebook before the
end of the 12-month window. [].
NEXT STOP, $1,100?
The dollar hit a one month high against a currency basket on
Tuesday as investors retreated from risk assets, before paring
those gains.
A strong dollar makes gold and other commodities priced in
the U.S. unit less attractive for non-U.S. investors [] but
gold bucked the trend.
"Gold is gold, people love it. Whether it's rational or not,
is another thing," said Stephen Briggs, commodity strategist at
RBS. "This has quite clearly broken away from the relationship
with the dollar.
"We wouldn't be surprised to see $1,100. It's gone up $25 in
the space of half an hour, so how can one say?"
Looking ahead, the U.S Federal Reserve begins a two-day
policy-setting meeting later this session.
While the bank is expected to keep benchmark interest rates
unchanged near zero, there is speculation it might alter its
pledge to keep rates low for an "extended period".
[].
In the broader markets, European stocks fell to a one month
low as banks suffered poor results. Declining equity markets
used to boost gold's safe haven appeal, but they have recently
worked to increase safe haven flows to the dollar. []
On the physical investment side, the picture still looked
subdued. The world's largest gold-backed exchange-traded fund,
SPDR Gold Trust <GLD>, said its holdings stood at 1,103.519
tonnes as of Nov. 2, unchanged from the previous business day.
[]
Other precious metals rallied in gold's wake, with silver
<XAG=> adding 2.8 percent to $16.90 an ounce, against $16.43 an
ounce late on Monday.
Silver has also been boosted by a pick-up in industrial
demand. The metal is primarily industrial in application, and is
widely used in electronics manufacturing.
Platinum <XPT=> rose to $1,340.50 an ounce compared with
$1,334.00, while palladium <XPD=> was at $323.00 against
$321.50.
(Additional reporting by Maytaal Angel in London; Editing by
Keiron Henderson)
