(Updates prices to late afternoon)
By Chikafumi Hodo
TOKYO, Jan 22 (Reuters) - Gold fell to its lowest in more
than two weeks on Tuesday, as euro weakness against the dollar
and sliding energy and global equity prices sparked profit
taking in the metal.
Japanese shares plunged 5.7 percent, Chinese stocks by more
than 8 percent and Indian stocks by 12 percent, prompting
investors to pull out from gold and other metals, including
Japanese platinum futures <0#JPL:> which fell more than 2
percent.
But traders expected gold to eventually draw safe-haven
demand on overall financial market uncertainty due to fears of
a U.S. recession.
"When heavy sell-offs in global stocks are happening, it's
tough to buy gold," said Hiroyuki Kikukawa, analyst at IDO
Securities in Tokyo.
"Gold is pressured now as the dollar is firming and stocks
are plunging. In the short term, gold could be weighed down but
the market is still bullish on gold in the long term," he said.
By 0652 GMT, spot gold was trading at $857.40/858.10 an
ounce, down from $864.30/865.00 in late European trade on
Monday.
U.S. markets were closed on Monday for the Martin Luther
King Day holiday.
The spot price fell as far as $855.00 on Tuesday -- the
lowest since Jan. 4. Gold was off about 6.5 percent from record
highs of $914 per ounce hit last week.
"There are still many market bulls in gold. Funds will flow
into gold once the stock market calms down," said a trader at a
Japanese trading house.
"At the moment, people want to lock in profits from gold
and lower exposures in commodities," he said.
COMEX gold futures slid from Friday's New York settlement.
The most active February contract was down $25.20 or 2.9
percent at $856.50.
Japanese precious metals prices fell as the yen reached a
2-1/2-year high against the dollar.
The benchmark December contract on the Tokyo Commodity
Exchange fell to a one-month low of 2,934 yen a gram.
It was trading at 2,945 yen, down 62 yen or 2.1 percent
from Monday's close.
"Japanese retail players are unwinding positions in TOCOM
gold, possibly to cover losses from the Nikkei," the Japanese
trade house trader said.
Japan's benchmark Nikkei average plunged 5.65 percent to a
28-month closing low on Tuesday, its biggest one-day loss since
the session after the Sept. 11 attacks on the United States in
2001, as growing fears about the U.S. economy sent global
stocks reeling. []. The Nikkei has lost more than
1,000 points and 9 percent this week.
The key December TOCOM platinum futures contract <0#JPL:>
fell by its daily 120 yen limit to 5,048 yen a gram on Tuesday.
The TOCOM platinum contract was the lowest intraday level
for any benchmark since Dec. 6.
Falls in TOCOM prices dragged down the cash price.
Platinum was at $1,515/1,519 an ounce, down about 1.4
percent from $1,537/1,542 in Europe on Monday.
Precious metals prices at 0650 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 857.20 -8.80 -1.02 2.94
Spot Silver 15.35 -0.20 -1.29 3.93
Spot Platinum 1515.00 -21.50 -1.40 -0.33
Spot Palladium 359.50 0.50 +0.14 -2.31
TOCOM Gold 2947.00 -60.00 -2.00 -3.69
123268
TOCOM Platinum 5048.00 -120.00 -2.32 -5.45
47389
TOCOM Silver 526.20 -20.30 -3.71 -2.74
2319
TOCOM Palladium 1242.00 -30.00 -2.36 -8.07
1006
Euro/Dollar 1.4424
Dollar/Yen 106.01
TOCOM prices in yen per gram, except for silver which is in
yen per 10 grams, spot prices in $ per ounce.
(Reporting by Chikafumi Hodo, editing by Jacqueline Wong)
