* Dollar holds gains after euro zone rate decision
* Trichet news conference at 1330 GMT eyed
* Speculation rife over further cenbank gold acquisitions
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Nov 5 (Reuters) - Gold retreated on Thursday from
the record high it hit last session as the firmer dollar
weighed, with the U.S. unit holding gains versus the euro after
the European Central Bank left interest rates unchanged.
The precious metal reached a record $1,097.25 an ounce on
Wednesday after a pledge from the U.S. Federal Reserve to keep
interest rates low knocked the dollar. But the currency bounced
back, diminishing interest in gold as an alternative asset.
Spot gold was bid at $1,089.75 an ounce at 1313 GMT, against
$1,092.35 late in New York on Wednesday. U.S. gold futures for
December delivery <GCZ9> on the COMEX division of the New York
Mercantile Exchange rose $3.20 to $1,090.50 an ounce.
"The fact that we didn't manage to go through $1,100 might
lead some investors to reconsider their positioning in the
sector," said Commerzbank analyst Eugen Weinberg.
"Should the dollar become stronger over the coming days I
would expect to see more profit taking," he added. "I think...
we will see a prolonged correction, because the trend of the
last few weeks is becoming a bit too pronounced."
The dollar index <.DXY>, which measures the U.S. currency's
performance against a basket of six others, was higher on
Thursday, holding onto gains after the ECB's rates decision.
[] []
Traders will be closely watching a news conference with ECB
president Jean-Claude Trichet due to begin at 1330 GMT for clues
as to the next direction of currency trade.
CENBANKS EYED
Speculation continued over the prospect of further central
bank gold acquisitions, after India's purchase of 200 tonnes of
bullion from the International Monetary Fund on Monday. The
report helped push gold to record highs. []
Sri Lanka's central bank said it had been buying gold for
the last five or six months as it diversifies its reserves amid
volatile markets. []
A former adviser to the People's Bank of China poured cold
water on the idea that the PBC will buy IMF gold, saying
locally-sourced bullion would be cheaper. []
In the physical market, gold traders in India, the world's
biggest bullion consumer last year, reported poor demand as high
prices put off buyers. []
"Demand continues to be slack even though we were running at
a discount of 150 (rupees per 10 grams)," said Pinakin Vyas,
chief manager-treasury at IndusInd Bank in Mumbai. "I have
advance orders at about $1,050 (an ounce).
Among other precious metals, spot silver <XAG=> was bid at
$17.39 an ounce against $17.44. Holdings of the world's biggest
silver-backed exchange-traded fund, the iShares Silver Trust
<SLV>, fell 3.85 tonnes on Wednesday. []
Platinum <XPT=> was at $1,356 an ounce against $1,364, while
palladium <XPD=> was flat at $327. The metals, both primarily
used in autocatalysts, are both sensitive to car demand.
Toyota Motor Corp, the world's biggest carmaker by sales,
halved its annual loss forecast but failed to convince investors
it is back on track, as government subsidies peter out and a
strong yen takes its toll. []
(Reporting by Jan Harvey; Editing by Keiron Henderson)
