* US housing data lifts dollar; Greek downgrade dents euro
* Dollar rises to 3-1/2-month highs versus euro
* SPDR Gold holdings rises closer to record high
(Recasts, updates prices, market activity; changes byline,
dateline, previously LONDON)
By Carole Vaporean
NEW YORK, Dec 22 (Reuters) - Gold slid on Tuesday to its
lowest price since Nov. 3 at $1,073.50 an ounce as the dollar
jumped to a 3-1/2-month high on the euro after news U.S. home
sales surged to their highest level in nearly three years.
The news propelled the dollar and U.S. equity markets
higher, with stocks shooting to a 14-month high. Both markets
worked to undermine gold prices which tumbled through a series
of seven-week lows. [] []
A firmer dollar makes dollar-priced commodities including
gold costlier for holders of other currencies.
Some gold sellers have redirected funds into the stock
market, boosting share prices.
"There had been a positive correlation between gold and
equities for quite awhile, and in recent weeks it went away
because the risk trade was back on. Now, they've been moving
money out of gold and appear to be putting some of it back into
equities," said Andy Montano, a director at ScotiaMocatta.
The housing data bolstered the view that U.S. economic
growth was gathering momentum, even though analysts pointed to
a U.S. tax credit for the increased sales pace of previously
owned homes in the United States. []
Just the same, inventories of unsold homes declined further
as did foreclosed properties in November.
"Home sales were a really positive report. The other
positive point is that inventory continues to decline so demand
and supply are moving back into equilibrium," said Anna
Piretti, senior economist at BNP Paribas in New York.
Whereas gold had been bought as a safe haven investment
during the credit and financial crises, Montano said, "Some of
these issues appear to be turning and investors are now in the
mood to change feet and invest in something else."
Spot gold <XAU=> was down at $1,082.05 an ounce by 3:32
p.m. EST (2032 GMT) versus $1,092.85 an ounce quoted in late
New York dealings on Monday.
U.S. COMEX gold futures for February delivery <GCG0> also
tumbled to a seven-week low at $1,075.20 an ounce on the New
York Mercantile Exchange. The benchmark contract settled with
$9.30 losses at $1,086.70 an ounce.
Appetite to buy bullion on dips was still seen keeping
prices sustained at the lower levels, however, with some
expecting the market's bull run to extend in 2010.
ScotiaMocatta, which specializes in trading the physical
metal, has seen its share of buying interest at the lows.
"We've seen some good physical buying coming out of the
main consuming areas in Asia and India and there have been
opportunities for people who need gold to buy it on the way
down," said Montano.
ETF HOLDINGS RISE
Other dealers, too, reported solid buying on dips in
anticipation of renewed price appreciation in 2010.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings rose 6.097 tonnes or 0.5
percent to 1,132.708 tonnes on Monday. They hit a record high
of 1,134.03 tonnes on June 1. []
And as a sign of robust physical demand, premiums for gold
bars jumped to their highest in months after a drop in bullion
prices spurred buying from investors and jewelers across Asia,
dealers said. []
Despite recent price dips, in the longer term many analysts
believe bullion's potential to rise remains intact.
"The investment sentiment towards gold is very positive,"
said analyst Suki Cooper at Barclays Capital, adding the
worries about inflation and the health of the economy could
help support gold prices.
Among other precious metals, silver <XAG=> fell to $16.93
an ounce against $17.01, platinum <XPT=> was bid lower at
$1,392.0 versus $1,414.50, and palladium <XPD=> slipped to
$352.50 against $360.50 an ounce late on Monday.
In U.S. futures markets, March silver <SIH0> trimmed
declines to end at $17.03 an ounce, down 0.50 cent. NYMEX
January platinum <PLF0> tumbled $26.60 to finish at $1,396.90
an ounce and March palladium <PAH0> lost $11.15 to close at
$354.25 an ounce.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCG0> 1086.70 -9.3 -0.8 884.3 22.9
US silver <SIH0> 17.030 -0.005 0.0 11.295 50.8
US platinum <PLF0> 1396.90 -26.60 -1.9 941.50 48.4
US palladium <PAH0> 354.25 -11.15 -3.1 188.70 87.7
Prices at 3:44 p.m. EST (2044 GMT)
Gold <XAU=> 1083.75 -9.10 -0.8 878.20 23.4
Silver <XAG=> 16.94 -0.07 -0.4 11.30 49.9
Platinum <XPT=> 1392.50 -22.00 -1.6 924.50 50.6
Palladium <XPD=> 352.50 -8.000 -2.2 184.50 91.1
Gold Fix <XAUFIX=> 1084.00 -10.25 -0.9 836.50 29.6
Silver Fix <XAGFIX=> 16.95 -32.00 -1.9 14.76 14.8
Platinum Fix <XPTFIX=> 1410.00 11.00 0.8 1529 -7.8
Palladium Fix<XPDFIX=> 359.00 3.00 0.8 365.0 -1.6
(Additional reporting Humeyra Pamuk and Rebekah Curtis in
London; Editing by David Gregorio)
