(Updates prices)
By Lewa Pardomuan
SINGAPORE, Feb 26 (Reuters) - Gold fell more than 1 percent
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.
Gold <XAU=> hit a low of $926.40 an ounce, down from
$937.80/938.60 an ounce late in New York on Monday and off last
week's record high of $953.60 an ounce. It later rebounded to
$929.00/929.80 an ounce.
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.
"IMF gold sales will not flow into the physical market. It
only transits from one central bank to another. That's all,"
William Kwan, a dealer at Phillip Futures in Singapore, said.
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.
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.
"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 edged up versus the euro on Tuesday as a credit
rating affirmation for a major U.S. bond insurer eased concerns
about the health of the global financial sector, boosting
equities and fanning risk appetite. []
"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 dropped 2 percent to track falls in gold and as
investors booked profit from last week's record high. Palladium
was below a 6-1/2-year high and silver off its best level in 27
years.
Spot platinum <XPT=> fell to $2,092/2,102 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 ended 124 yen per gram lower at 7,065 yen.
Palladium <XPD=> fell to $503.00/508.00 an ounce from
$520/525 an ounce late in New York.
Silver <XAG=> dropped to $17.97/18.02 an ounce from
$18.07/18.12 an ounce -- off a 27-year peak of $18.15 hit on
Monday.
Precious metals prices at 0842 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 928.60 -11.00 -1.17 11.52
Spot Silver 17.96 -0.11 -0.61 21.60
Spot Platinum 2092.00 -43.00 -2.01 37.63
Spot Palladium 503.00 -17.00 -3.27 36.68
TOCOM Gold 3240.00 -51.00 -1.55 5.88
95721
TOCOM Platinum 7065.00 -124.00 -1.72 32.33
22306
TOCOM Silver 626.40 -2.70 -0.43 15.79
1938
TOCOM Palladium 1798.00 -24.00 -1.32 33.09
18281
Euro/Dollar 1.4799
Dollar/Yen 107.99
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
