* Auto plan failure boosts gold
* Precious markets eye April 2 G20 meeting
* SPDR holdings rise to record
(Recasts, adds comment/detail, previous TOKYO)
By Pratima Desai
LONDON, March 30 (Reuters) - Gold held firm on Monday as
investors spooked by renewed turmoil on equity markets turned to
the metal, but the stronger dollar is expected to cap gains.
Spot gold <XAU=> was at $922/923 an ounce at 0929 GMT
compared with $922.10 an ounce late in New York on Friday. The
precious metal fell 3 percent last week, but has held above $900
on buying by gold-backed exchange traded commodity funds.
Equity markets were down after Washington rejected plans to
restructure U.S. automakers General Motors and Chrsyler for more
government aid, pushing them closer to bankruptcies that could
deepen the U.S. recession. [] []
"Tendencies on equity markets and the dollar will be the
dominant factors for oil and gold this week," said Barbara
Lambrecht, analyst at Commerzbank.
Investors use gold as a hedge against financial uncertainty
and inflation, while a higher U.S. currency makes gold priced in
dollars more expensive for holders of other currencies.
The dollar rose against the euro after the Bank of Spain
said it would bail out a regional savings bank in trouble
because of the slumping property market. []
Euro sentiment suffered a blow last week after Germany's
Finance Minister Peer Steinbrueck said budget irresponsibility
in Europe would damage credibility.
Markets are looking ahead to the April 2 summit of the
world's 20 biggest economies to discuss regulation and spending
to help end the worst recession since the 1930s. []
VOLATILE QUARTER
A boost for gold was news that investors are still buying
the metal. The world's largest gold-backed exchange-traded fund,
the SPDR Gold Trust <GLD>, said holdings rose 2.45 tonnes to a
record 1,127.44 tonnes on March 29. []
"Demand in the jewellery sector has been very slow and as
economic fears have combined with high prices to generate
substantial scrap flows, it has only been investment that has
kept prices high," Societe Generale said in a note.
"For the coming quarter prices look likely to be volatile
although within a comparatively narrow range (by recent
standards) and there is the clear possibility of new record
prices in dollar terms."
Gold rose to an 11-month high above $1,000 an ounce on
February 20 as worries about the banking crisis escalated and
slipped to $882.90 on March 20 on profit-taking as the dollar
rose and equity markets calmed.
But concern about a major auto industry failure has returned
to haunt markets, particularly autocatalyst material platinum
<XPT=>, which rose to $1,159 last week, the highest since last
September.
Platinum prices have, however, halved since a record high of
$2,290 an ounce in March 2008 on deteriorating sales in the car
industry and bleak prospects.
"We expect the more industrial-based metals to remain under
pressure in the near term, with the worsening economic
conditions and the slowdown in vehicle sales," Barclays Capital
said in a note.
Platinum <XPT-> was at $1,120/1,130 an ounce from $1,123 on
Friday, silver <XAG=> at $13.12/13.19 from $13.27 and palladium
<XPD=> at $214/219 from $217.50.
(For details on the gold holdings of the ETF listed in New
York and co-listed on other exchanges, click on:
http://www.exchangetradedgold.com/iframes/usa.php)
(Editing by James Jukwey)
