* Gold pressured as oil retreats on OPEC hope, equities up
* Bullion underpinned by ongoing clashes in Libya
* Coming up: U.S. wholesale sales data on Wednesday
(Adds graphic)
By Frank Tang
NEW YORK, March 8 (Reuters) - Gold dropped below $1,430 an
ounce on Tuesday after the previous day's record high, as
easing crude oil prices and a Wall Street rally prompted
investors to lock in recent gains.
Gold has risen about 10 percent in the last six weeks, as
clashes in Libya and turbulence across the Arab world have
encouraged investors to seek a safe haven, while oil has gained
about 17 percent in the same period, increasing gold's
inflation hedge appeal.
"It's profit-taking as we have a stronger dollar.
Certainly, it's a rotation out of the 'long gold, long metal
long energies' trade, and stocks seem to be the beneficiary of
it," said Zachary Oxman, managing director of TrendMax
Futures.
Bullion was dragged lower on oil's pullback as OPEC
considered boosting production for the first time in more than
two years, The news sent U.S. stocks rallying over 1 percent,
while the dollar rose against the euro for a second day on
renewed euro zone debt worries. []
Spot gold <XAU=> fell 0.2 percent to $1,427.54 an ounce by
2:30 p.m. EST (1930 GMT). U.S. gold futures for April delivery
<GCJ1> settled down $7.30 at $1,427.20, with volume lower than
its previous sessions and about one-third below its 30-day
average, preliminary Reuters data showed.
GOLD FOLLOWING OIL
In the last year, the correlation between gold and oil
<CLc1> has been largely erratic but in the last few trading
sessions the positive link between the commodities have
strengthened.
(Graphic: http://link.reuters.com/huq48r)
The correlation is expected to remain strong in the near
term as tension escalate in Libya, with government forces
attacking rebels with rockets, tanks and warplanes,
intensifying their offensive to crush the revolt against
Muammar Gaddafi. []
Gold hit a record $1,444.40 an ounce and oil rallied on
Monday but both oil and gold later retreated on speculation
that Gaddafi might step down.
Gold's failure to rise further indicated the precious
metals complex will come under heavy pressure on any setback in
oil prices, an analyst said.
"Despite the escalation of the unrest in Libya, gold has
been struggling to gain a foothold above the old highs with
some investors seemingly happy to lock in profit at these
levels," said Saxo Bank analyst Ole Hansen.
Oil prices are often seen as a leading indicator of risk
perceptions in the oil-rich Middle East and North Africa
region, so falling prices tend to suggest less need to hold
gold as a haven from risk.
GOLD ETF HOLDINGS RISE
Silver <XAG=> fell 0.1 percent to $35.80 an ounce, a day
after the metal climbed to a 31-year high on Monday.
On Tuesday, the gold/silver ratio remained under 40:1, the
lowest since February 1998, and not far away from its weakest
in the past three decades.
Eric Sprott, a hedge-fund manager, said silver is likely to
keep outperforming gold. "I watch where the money goes and the
money's going into silver. There's as much money going into
silver as into gold in dollar terms," he said. []
Investors poured into precious metals investment products
to seek a safe haven amid political and economic uncertainty.
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, rose for the first time
since Feb. 1 on Monday, by 6.7 tonnes. []
Meanwhile holdings of the largest silver ETF, the iShares
Silver Trust <SLV>, rose to two-month highs of 10,898.14
tonnes, climbing 103.25 tonnes, their largest one-day rise
since Feb. 23. []
Platinum <XPT=> lost 1.1 percent at $1,796.24 an ounce, and
palladium <XPD=> dipped 0.3 percent to $783.72.
Prices at 2:28 p.m. EST (1928 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1427.20 -7.30 -0.5% 0.4%
US silver <SIK1> 35.658 -0.207 0.0% 15.3%
US platinum <PLJ1> 1802.60 -17.80 -1.0% 1.4%
US palladium <PAM1> 786.70 -3.40 -0.4% -2.1%
Gold <XAU=> 1426.80 -3.94 -0.3% 0.5%
Silver <XAG=> 35.80 -0.05 -0.1% 16.0%
Platinum <XPT=> 1796.24 -20.25 -1.1% 1.6%
Palladium <XPD=> 783.72 -2.25 -0.3% -2.0%
Gold Fix <XAUFIX=> 1426.25 -8.75 -0.6% 1.1%
Silver Fix <XAGFIX=> 36.37 -23.00 -0.6% 18.7%
Platinum Fix <XPTFIX=> 1808.00 7.00 0.4% 4.4%
Palladium Fix <XPDFIX=> 781.00 8.00 1.0% -1.3%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by Lisa Shumaker)
