* SPDR gold ETF records first outflow since early January
* Julius Baer's gold ETF up 18 percent last week
* Physical jewellery demand weak
(Recasts, adds comment, updates prices)
By Jan Harvey
LONDON, March 9 (Reuters) - Gold prices slipped more than 2
percent on Monday after the dollar rose and data showed a small
fall in holdings of exchange traded funds.
Spot gold <XAU=> fell to a low of $913.53 an ounce and was
at $916.60/917.60 an ounce at 1629 GMT from $939.60 late in New
York on Friday.
"Right now the dollar is a little bit stronger and equity
markets (generally) are a bit stronger as well so we don't see
much inflows into gold exchange traded funds (ETFs)," said
Commerzbank analyst Eugen Weinberg.
The world's largest gold-backed exchange traded fund (ETF)
recorded its first decline since January 8. Its holdings dipped
0.3 tonnes to 1,028.99 tonnes as of March 8. []
UBS analyst John Reade said the total gold holdings of the
nine major ETFs the bank follows fell to 48.30 million ounces on
March 6 from a revised total of 48.40 million ounces previously.
The dollar gained across the board as global recession fears
and banking sector concerns weighed on world stock markets,
spurring safe-haven demand for the greenback. []
A higher U.S. currency makes metals priced in dollars more
expensive for holders of other currencies. Gold is often also
used as an alterntive when the dollar falls out of favour.
Earlier a rise in U.S. stocks also weighed on gold, which is
used a hedge against financial market instability. []
SOLID ETF DEMAND
Equity weakness broadly supported gold towards the end of
last week, although the precious metal was caught up in a stocks
sell-off last Monday as investors sought liquidity.
Demand for the precious metal from ETFs, which issue
securities backed by physical stocks of gold, was a major price
driver earlier in the year. Taders said expected these inflows
to resume as uncertainty grows.
"I think that there will be enough worrying news in the
first half of 2009 for ETF demand to remain solid," said David
Thurtell, an analyst at Citigroup.
Holdings of Julius Baer's <BAER.VX> gold-backed exchange
traded fund rose 109,000 ounces or 18 percent last week, the
bank said in a weekly statement on Monday. []
Demand for gold from jewellery buyers in traditionally
strong markets such as India and China remained weak, however.
Traders said scrap sales also put pressure on premiums for
gold bars.
Spot silver <XAG=> slipped to $13.01/13.08 an ounce from
$13.32. Platinum <XPT=> fell to $1,055/1,060 an ounce from
$1,066, while palladium <XPD=> slipped to $195/200 an ounce from
$201 late on Friday.
(Additional reporting by Paul Lauener and Pratima Desai)
(Reporting by Jan Harvey; Editing by William Hardy)
