* Equities, industrial commodities rally
* Eyes on G20 meeting April 2
* SPDR holdings hit a record 1,114.60 tonnes.
(Recasts, adds details, changes dateline from TOKOY)
By Pratima Desai
LONDON, March 23 (Reuters) - Gold held firm on Monday as
worries about the weaker dollar and price pressures were offset
by new details on a U.S. plan to cleanse banks of toxic assets.
Spot gold <XAU=> was at $951.50/953.10 an ounce at 1011 GMT,
up from $950.90 late in New York on Friday when it rose as high
as $966.70, the highest since Feb. 25.
The U.S. government fleshed out a plan it hopes can purge
banks of up to $1 trillion in toxic assets, a key element of its
drive to pull the world's biggest economy out of a deep
recession. []
Equity markets and industrial commodities such as copper and
oil rallied as markets tried to price in the possibility the
crisis engulfing financial markets could at last be coming to an
end. [] []
"People are putting forward ideas before the G20 meeting,
everyone is watching to see what will happen there," Simon
Weeks, director of precious metals at the Bank of Nova Scotia,
said. "But it seems as if people still want security."
The G20 meeting is on April 2.
Gold is used as a hedge against financial uncertainty and
against inflation, which is expected to take off because of the
vast amounts of money being piped into the global economy by
central banks and governments.
It is also used as an alternative currency to the dollar,
which tumbled last week on news of the U.S. plan buy long-dated
U.S. Treasuries.
THICK AND FAST
The dollar last week tumbled against the euro after U.S.
government plans to buy government bonds led to concerns it
could lead to an oversupply of the world's main reserve
currency. []
Many investors fearing wealth erosion from inflation and the
banking crisis have headed for the safety of gold-backed
exchange traded funds such as SPDR Gold Trust <GLD>, the world's
largest.
SPDR's holdings hit a record 1,114.60 tonnes as of March 20,
up 11.31 tonnes or 1 percent from the previous day. []
However, the gold market remains vulnerable to plans for
stimulus, coming thick and fast for some months now.
"We expect the possibility of further Fed action will
support the economic outlook and increase risk appetite over
time and potentially slow inflows into gold exchange traded
funds," Deutsche Bank said in a note.
Fading interest could take gold further away from the record
high of $1,030.80 an ounce hit in March 2008.
Prices of precious industrial metals also held firm on
expectations that a demand recovery could be in the pipeline.
Spot silver <XAG=> was bid at $13.84 an ounce from $13.72
late in New York on Friday, palladium <XPD=> at $207 from
$204.50 and platinum at $1,120 from $1,112.50.
Platinum used in autocatalysts has been hard hit by the
downturn in the auto sector in recent months.
But news that Abu Dhabi government-linked Aabar Investment
<AABAR.AD> completed a $1.82 billion capital hike after taking a
9.1 percent stake in Daimler <DAIGn.DE> has helped the mood in
the platinum market, traders said. []
"The investment means someone, somewhere thinks there could
be an end to all this," a London-based trader said.
Reinforcing that was Goldman Sachs, which raised its view on
the European auto sector to "attractive" on expectations that
the worst is over. []
(Reporting by Pratima Desai; editing by Sue Thomas)
