(Adds closing in Tokyo)
By Lewa Pardomuan
SINGAPORE, Jan 31 (Reuters) - Gold firmed on Thursday after
the U.S. Federal Reserve slashed interest rates by half a
percentage point, but a drop in crude oil prices limited gains,
preventing the metal from breaking recent record highs.
Spot gold <XAU=> rose to $923.80/924.70 an ounce from
$921.10/921.80 ounce late in New York on Wednesday, when it
rallied to $932.00 -- just below Tuesday's all-time high of
$933.10.
The market remained volatile after this week's rally, with
dealers also noting selling by Japanese speculators and other
holders, which dragged down the price to as low as $920.50.
"The market will keep up the good sentiment to try the next
record high," said Louis Lok, a dealer at Bank of China in Hong
Kong.
But charts indicated that gold may have trouble sustaining
the uptrend, said Lok. "I would expect the market to try around
$930 but if it can't break a new record high, we may a see
correction again before Friday."
Gold's 14-day relative strength indicator (RSI) was at
73.805 on Wednesday, up from 60.895 on Jan. 22, when the metal
dropped to its lowest in nearly three weeks. The market views
an RSI of 30 or less as oversold and 70 or more as overbought.
Crude oil <CLc1> futures fell more than a dollar on fears
more losses in the U.S.financial sector will continue to weaken
the economy of theworld's largest oil consumer.
"Just for today, I am looking at $935," said William Kwan,
a dealer at Phillip Futures in Singapore, referring to the
upside.
"But based on technical point of view, I am looking at a
downside possibility to as low as $905 for spot gold," he said.
COMEX's April gold futures <GCJ8> firmed but were off
Wednesday's record high of $942.20 an ounce.
The Fed cut U.S. interest rates by a half-percentage point
on Wednesday as part of an aggressive effort to halt a sharp
slowdown in an economy hit by a housing slump and a credit
crunch. []
The move comes just eight days after the U.S. central bank
unexpectedly cut its lending rate by three quarters of a point
to boost the economy. A U.S. rate cut tends to weaken the
dollar and boost gold's appeal as an an alternative investment.
The dollar inched up to 106.40 <JPY=>, while the euro eased
to $1.4831 <EUR=>.
While investors were expected investors to buy gold on
dips, dealers said a lack of interest from the jewellery sector
in main consumer India during the normally busy wedding season
could eventually dampen sentiment.
"I do find find the physical sector is not too willing to
buy gold at this price here," said Kwan of Phillip Futures.
"The price is a bit on the high side, that's why they do
feel the pinch," he said.
Investors across Asia are cashing in on gold's rally to a
record peak around $930 an ounce, but jewellery makers are
struggling to attract consumers, who are turned off by the high
prices. []
The benchmark gold futures contract <0#JAU:> on the Tokyo
Commodity Exchange ended 13 yen per gram higher at 3,195 yen.
Platinum <XPT=> firmed to $1,686.50/1,691.50 an ounce from
$1,684/1,688 an ounce late in New York.
Silver <XAG=> fell to $16.74/16.79 an ounce from
$16.82/16.87 in New York. Palladium <XPD=> dropped to
$384.50/387.50 an ounce from $386.00/389 an ounce.
Precious metals prices at 0834 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 924.20 -3.80 -0.41 10.99
Spot Silver 16.76 -0.04 -0.24 13.47
Spot Platinum 1686.50 2.50 +0.15 10.95
Spot Palladium 384.50 -1.50 -0.39 4.48
TOCOM Gold 3195.00 13.00 +0.41 4.41
84486
TOCOM Platinum 5541.00 15.00 +0.27 3.78
31936
TOCOM Silver 579.30 6.30 +1.10 7.08
1252
TOCOM Palladium 1342.00 -10.00 -0.74 -0.67
642
Euro/Dollar 1.4845
Dollar/Yen 106.73
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by )
