* Gold eases; focus on dollar, Indian demand worries
* Analysts split on greenback, holds near three-week high
SINGAPORE, Jan 6 (Reuters) - Gold extended losses early on
Tuesday, slipping half a percent following Monday's drop of
nearly two percent on dollar weakness and worries about
physical demand from India, the world's largest gold consumer.
The U.S. dollar edged higher against the euro at $1.3592,
holding near Monday's three-week high versus the single
currency. []
"We had a bullish tilt towards gold through December but
further strength in the dollar might see gold erode some of
those gains," said Toby Hassall, research analyst at Commodity
Warrants Australia.
He added that the risks appeared weighted towards a
stronger dollar and gold prices could slip another 15 percent
or more in the next three months.
"U.S. interest rates can't get any lower, but there is room
for more expansionary monetary policy in the eurozone, which
should strengthen the dollar ... While the dollar firms, we
might see gold move towards $800 and then $700 during the first
quarter."
Gold <XAU=> traded $3.90 lower at $855.00 an ounce by 0255
GMT, from New York's notional close on Monday, when it dipped
to $843.50, its lowest in over a week.
But not all analysts were looking for the dollar rally to
continue.
"The dollar is the key short-term driver for gold. Over the
course of the quarter we expect the dollar to weaken against
the euro," said David Moore, Commonwealth Bank's commodities
strategist in Sydney.
Worries about the ailing international economy in the first
half of 2009 would generate some safe haven demand for bullion,
but slowing physical demand from India was a concern, he added.
"Indian gold imports were very low and that could be
significant. An impairment of Indian demand for jewellery could
take out some of the floor under gold prices."
Gold imports by India, the world's largest buyer of the
metal, fell 81 percent in December, and were down 47 percent in
2008 as high prices and a slowing economy dented demand.
[]
New York gold futures <GCG9> fell $2.3 an ounce to $855.5
in electronic trade, while in Tokyo, December 2009 futures
<JAUc6> were down 1.1 percent at 2,566 yuan per gram.
Oil prices <CLc1> ticked down 12 cents or 0.25 percent to
$48.69 a barrel, supported by geopolitical worries in the
Middle East and a dispute between Russia and Ukraine over gas
pricing.
Oil prices have risen from around $35 a barrel since Israel
launched its Gaza offensive on Dec. 27, heightening fears of
possible disruptions of crude supplies from the Middle East.
[]
But the fighting in Gaza did little to support gold.
"It would take a far more serious escalation of the
violence in the Middle East to drive safe haven buying," a
dealer in Singapore said.
Platinum <XPT=> dropped 1 percent or $9.50 to $936.50, but
the TOCOM benchmark <JPLc3> rose 1.23 percent to 2,800 yen,
bringing its gains since the start of the year to 5.6 percent.
Precious metals prices at 0255 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 855.00 -3.90 -0.45 -2.86
Spot Silver 11.11 -0.11 -0.98 -1.86
Spot Platinum 936.50 -9.50 -1.00 0.48
Spot Palladium 182.00 -1.50 -0.82 -1.36
TOCOM Gold 2566.00 -28.00 -1.08 -0.27
14953
TOCOM Platinum 2800.00 34.00 +1.23 5.58
5723
TOCOM Silver 330.00 -8.40 -2.48 3.35
633
TOCOM Palladium 560.00 -18.00 -3.11 1.82
386
Euro/Dollar 1.3592
Dollar/Yen 93.18
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Nick Trevethan; Editing by Clarence Fernandez)
