*Palladium <XPD=> hits 19-mth high before paring gains
*Lease rates for PGMs high, reflecting investment demand
*Holdings of SPDR Gold Trust unchanged
By Risa Maeda
TOKYO, Jan 21 (Reuters) - Gold steadied above $1,110 an ounce
on Thursday, trimming earlier gains, as strong growth data from
China increased concern that Beijing may rein in the country's
rapid expansion and sent the dollar higher.
The allure of gold as a hedge against a weakening dollar was
sapped as the euro <EUR=> fell to a five-month low below $1.4080
after the Chinese data, while the dollar index <.DXY> rose to its
highest in four months.
The data showed China easily beat its 2009 growth target,
with its gross domestic product expanding 10.7 percent in the
fourth quarter from a year earlier. []
Gold's retreat weighed on the prices of the platinum group
metals, platinum and palladium, but they mostly held onto recent
gains, supported by expectations of continued money inflows.
Platinum and palladium, both valued for their use in
automobile catalytic converters, have been trading at multi-month
highs after the launch of U.S.-based exchange-traded funds backed
by the metals this month.
"Gold has taken a blow from the falling euro. But (platinum
group metals) are showing relatively solid footing. They look
healthy especially after a rebound in platinum from a trough
below $1,600 last night," said Kaname Gokon, deputy general
manager at a Japanese commodity brokerage Okato Shoji Co's
research section.
Spot gold <XAU=> was at $1,111.10 an ounce as of 0254 GMT,
flat from New York's notional close. It stayed above Wednesday's
low of $1,107, its lowest since Jan. 4, as pent-up buying
underpinned the downside, traders said.
U.S. gold futures for February delivery <GCG0> were at
$1,116.10 an ounce, up 0.3 percent.
Spot palladium <XPD=> rose as high as $471.25 per ounce, its
highest since late June 2008, before trimming its gains, in line
with a fall in gold.
It stood at at $469.75, up 1 percent from New York.
Spot platinum <XPT=> was at $1,620 per ounce, down 0.1
percent from New York's $1,622.50. On Wednesday, it rose as high
as $1,654, a 17-month high, before reversing the gains to hit a
trough of $1,582.50.
High lease rates currently are a good indicator of how strong
investors' appetite is for PGMs, said a manager at a Japanese
trading company.
"Lease rates for platinum and palladium started rising
significantly a day before the launch of the U.S.-based ETFs,"
the manager said, adding that lease rates for the two metals are
now around 2 percent.
That is compared with gold's three-month lease rates <LGLR>
around 0.05 percent.
Underlining slowing investment demand in gold, the holdings
of the world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, remained unchanged at 1,111.922 tonnes on
Wednesday from the previous day. []
Precious metals prices at 0325 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1111.65 -9.35 -0.83 1.46
Spot Silver 17.90 0.35 +1.99 6.36
Spot Platinum 1517.00 -4.00 -0.26 3.41
Spot Palladium 468.25 3.25 +0.70 15.47
TOCOM Gold 3282.00 -49.00 -1.47 0.71 48312
TOCOM Platinum 4753.00 -52.00 -1.08 8.49 16353
TOCOM Silver 53.20 -2.00 -3.62 2.90 340
TOCOM Palladium 1370.00 35.00 +2.62 17.60 369
Euro/Dollar 1.4079
Dollar/Yen 91.49
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by David Dolan)
