* Gold slips 1.7 percent to low of $980.40/oz
* Price remains near one-year highs
(Recasts, adds comments/details, changes dateline from TOKYO)
By Michael Taylor
LONDON, Feb 23 (Reuters) - Gold fell almost 2 percent on
Monday, tracking back from one-year highs as concerns over the
global economy eased and equities rebounded from multi-year
lows.
At 1034 GMT, spot gold <XAU=> was trading at $985.60/987.20
an ounce versus $997.30 in New York late on Friday. It hit
$1,005.40 an ounce on Friday, just 2.5 percent below a record
$1,030.80 an ounce it reached in March last year.
"People are taking a bit of profit after the last week,"
Walter De Wet, a strategist at Standard Bank, said.
"There is still a lot of uncertainty to what is happening to
Citi but all of that should really support the metals. It's a
bit of profit-taking."
De Wet said gold should find support above $970. "Our
average is $915 for the year -- we are bullish for gold."
European shares opened higher, led by financials, on relief
the U.S. government may not, contrary to market talk on Friday,
have to nationalise big banks. []
Citigroup Inc <C.N> is in talks that could see the U.S.
government take a bigger stake, a source said, sparking a
recovery in the battered share price of what was once the
country's most valuable bank. []
Investor appetite for gold has increased sharply as
financial markets have fallen and fears over long-term inflation
have risen due to a massive U.S. economic stimulus package that
was signed last week. Gold is perceived as a safe-haven asset.
ETF
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said holdings were 1,028.98 tonnes as of Feb.
22, level with the record high of late last week. []
Futures for April delivery <GCJ9> on the COMEX division of
the New York Mercantile Exchange was down 1.5 percent at $987 an
ounce. On Friday they reached a high of $1,007.70, their highest
since March 2008.
"We would caution that with Comex investors holding large
net long positions this view is not without its risks," John
Reade, commodity strategist at UBS, said.
"We continue to be wary of a bear-market rally in equities
-- profit taking could see gold correct, yet predicting the
timing of a sentiment change is impossible, so we merely
highlight the risks that large, long gold positions on Comex
pose to investors."
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, India, the world's biggest gold buyer, is likely to
import about 400 tonnes of gold this year, about the same as
2008, with high prices keeping demand low for the time being,
the vice-president of the Bombay Bullion Association said.
[]
Among other precious metals, spot silver <XAG=> was at
$14.27/14.33 an ounce from $14.38 on Friday.
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its bullion holdings rose
nearly 135 tonnes or 1.7 percent on Feb 20 to record levels.
Spot platinum <XPT=> was at $1,078.50/1,088.50 an ounce from
its previous close of $1,080, while spot palladium <XPD=> was at
$212.50/217.50 from $212.50.
(Additional reporting by Chikako Mogi in Tokyo; editing by Sue
Thomas)
