* Gold dips below $920, ETF stays just below record
* Gold briefly falls nearly 1 pct as Nikkei comes off lows
* Weak jewellery fabrication demand weighs on market
By Chikako Mogi
TOKYO, March 10 (Reuters) - Gold dipped on Tuesday, falling
below $920 after sinking more than 2 percent in the previous
session, as investors reassessed current market levels relative
to other assets.
Worries about the deepening global recession and the
financial system helped gold keep its appeal as a safe haven,
though it has been undergoing consolidation after peeping above
$1,000 last month for the first time in nearly a year.
Spot gold <XAU=> was at $915.50 an ounce as of 0635 GMT, down
0.6 percent from New York's notional close on Monday. Prices are
now down about 9 percent from the 11-month high above $1,000
marked on Feb. 20. It hit a record of $1,030.80 in March 2008.
Gold fell as low as $912.10 an ounce, or down nearly 1
percent, as Tokyo's Nikkei share average came off earlier lows
and briefly turned positive. The Nikkei ended down 0.4 percent
<>.
"It seems various markets are nearing their bottom, at least
for now, and investors may be looking around to where the
downside to prices is limited," said a general manager at a
Japanese mining company.
"That gold extended losses when the Nikkei moved off its
earlier losses suggests investors may feel the stock market is
near its bottom, which means money will not necessarily all go to
gold," he said.
"Gold doesn't move on its own, it follows wherever money is
going, sometimes tracking oil, other times currencies, although
it's unclear which currency it has a close correlation to now,"
he said.
Gold prices, which often move in the opposite direction to
the dollar, had risen along with the U.S. currency as investors
fled assets seen as more risky. But gold prices fell on Monday as
recession fears and banking concerns prompted investors to divert
money out of gold and into U.S. Treasuries.
"Gold strength relies on strength in investment flows, which
are relatively inconsistent," said David Moore, a commodity
strategist at Commonwealth Bank of Australia.
"Flows of investment in gold are variable and changeable with
different conditions. They have been affected by moves in other
markets as well as economic and financial worries -- it has waxed
and waned."
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings stood at 1,028.99 tonnes as
of March 9, unchanged from March 8 when they dipped for the first
time since January. []
That decline was 0.3 tonnes or 0.03 percent from the record
1,029.29 tonnes first hit on Feb. 26.
Traders say investors have become cautious after prices rose
above $1,000, and given that current price levels are relatively
high they are likely to be prompted to take profits, slowing
buying momentum as prices inch nearer the $1,000 level.
Safe-haven moves into gold have eased, possibly reflecting
different perceptions about the need for safe-haven assets, Moore
said.
Higher gold prices and the global recession have hit gold
jewellery buying in traditionally strong markets, traders said.
Gold jewellery buying accounts for about 60 percent of total gold
demand.
The dollar fell against the euro and other major currencies
on Tuesday, retracing some of the previous day's steep gains, as
investors paused to assess the risk outlook and Asian share
markets showed a mixed picture. []
A stronger dollar makes metals more expensive for holders of
other currencies.
Precious metals prices at 0630 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 915.90 -5.05 -0.55 4.06
Spot Silver 12.85 -0.07 -0.54 13.52
Spot Platinum 1053.50 -4.50 -0.43 13.04
Spot Palladium 195.00 1.00 +0.52 5.69
TOCOM Gold 2908.00 -71.00 -2.38 13.02 52102
TOCOM Platinum 3336.00 -39.00 -1.16 25.79 7366
TOCOM Silver 402.00 -14.00 -3.37 25.90 506
TOCOM Palladium 629.00 -10.00 -1.56 14.36 294
Euro/Dollar 1.2707
Dollar/Yen 98.36
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Miho Yoshikawa; Editing by Chris
Gallagher)
