* Gold eases after topping $1,000, eyes on record high
* Safe-haven appeal firmly in place as stocks tumble
* Eyes on stocks, ETF for gold market performance
By Chikako Mogi
TOKYO, Feb 23 (Reuters) - Gold eased on Monday after
topping $1,000 last week, but eyes remain on the possibility of
a record high as investors flock to the metal amid tumbling
share prices.
As financial markets melt down -- the Dow Jones industrials
and European shares slid to six-year lows last week -- the
appetite for gold has helped it rise 12 percent this year
despite weakening industrial and luxury demand.
"Gold is fundamentally supported by investment flows mainly
related to strong investor interest as a safe-haven asset,"
said David Moore, a commodities analyst at Commonwealth Bank of
Australia.
Spot gold <XAU=> was at $990.85 an ounce at 0230 GMT, down
0.6 percent from New York's notional close on Friday, as stock
markets rallied on a report that the U.S. government could take
as much as a 40 percent stake in Citigroup Inc.
On Friday it hit $1,005.40, just 2.5 percent below the
all-time high of $1,030.80 an ounce set in March last year.
Volumes of commodity exchange-traded funds and the
performance of the equities market were key to gauging how far
gold prices could rise and how fast, said Yuichi Ikemizu, Tokyo
branch manager at Standard Bank Plc.
"If stocks continue to fall, gold will keep rising," he
said.
Underlining the move from other assets into the precious
metal, a ratio of gold against the S&P 500 index rose to its
highest level since September 1990, and the gold/oil ratio was
at its loftiest since December 1998, according to Reuters data.
"I don't know high high and fast gold prices will rise. It
will depend on ETFs, as money which was not flowing into gold
before is flocking into gold via ETFs," Ikemizu said.
Exchange traded funds allow easy access to gold holdings
via a stock exchange-listed fund, and are a key gauge of
investor interest in the metal.
The world's largest gold-backed ETF, SPDR Gold Trust <GLD>,
said holdings were 1,028.98 tonnes as of Feb. 22, level with
the record high of late last week. []
Further evidence of the gold market's strength came from
data showing that speculative gold players boosted their net
long positions to 165,921 lots on gold futures traded on COMEX
at Feb. 17, up from 163,622 a week earlier. []
The main pressure on gold comes from falling consumer and
industrial demand, which could cause prices to fall back from
their recent highs.
World Gold Council data last week showed that in 2008
jewellery demand fell 11 percent in tonnage terms while
industrial demand also fell 7 percent on reduced spending on
items such as laptops and mobile phones.
For a graphic of consumer demand trends in gold, click on:
https://customers.reuters.com/d/graphics/CN_GOLD0209.gif
Also, export volumes of gold jewellery from Italy, a major
world exporter, are set to fall in the first half of 2009 as
the economic downturn hit consumer demand across the globe.
[]
Precious metals prices at 0250 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 988.80 -8.50 -0.85 12.34
Spot Silver 14.36 -0.02 -0.14 26.86
Spot Platinum 1080.00 0.00 +0.00 15.88
Spot Palladium 212.50 0.00 +0.00 15.18
TOCOM Gold 2971.00 7.00 +0.24 15.47
30939
TOCOM Platinum 3227.00 -26.00 -0.80 21.68
5471
TOCOM Silver 425.80 3.80 +0.90 33.35
1788
TOCOM Palladium 646.00 -13.00 -1.97 17.45
150
Euro/Dollar 1.2915
Dollar/Yen 93.02
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda; Editing by Michael
Urquhart)
