* Spot gold to fall to $1,390 - technicals
* Coming up: U.s. ISM Manufacturing PMI, Feb; 1500 GMT
(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, March 1 (Reuters) - Spot gold steadied around
$1,410 on Tuesday as escalating unrest in Libya and the Middle
East supported safe-haven demand, though holdings in the biggest
gold-backed exchange-traded fund fell to the lowest level in
more than nine months.
Forces loyal to Libyan leader Muammar Gaddafi were massed
near the Tunisian border on Tuesday, as the United States said
it was moving warships and aircrafts closer to Libya,
heightening tension in the volatile region.
Spot gold was nearly flat at $1,411 an ounce by 0339
GMT. It had been moving in a narrow range of less then $4.
The most active U.S. gold futures contract edged up
0.1 percent at $1,411.90.
"There has been some scrap selling and liquidation above
$1,405," said Peter Fung, head of dealing department at Wing
Fung Precious Metals in Hong Kong.
"We'll probably see a price range between $1,405 and
$1,415."
But even as the political turmoil in the Middle East and
North Africa continued to support safe-haven demand, improved
economic prospects could weigh on gold prices, traders said.
Gold prices could drop 20 percent later this year and in
2012 as the global economy picks up, as speculators exit the
market, said the Australian Bureau of Agricultural and Resource
Economics and Sciences (ABARES).
Holdings in the SPDR Gold Trust dipped to the lowest
since mid-May last year in a sign that investors may be
switching to stocks and other assets, a dealer said.
"The money from gold ETF may have gone to the stock market,
which has outperformed gold recently," said a Hong Kong-based
dealer.
Spot gold inched down half a percent so far this year,
compared to a 5.6 percent climb in the Dow Jones industrial
average .
On the macroeconomic front, Chinese manufacturing growth
slowed in February to a six-month low, according to an official
survey, as the government's sustained campaign to tame inflation
weighed on industrial activity.
Australia's central bank decided to keep its main cash rates
steady at 4.75 percent as widely expected, said it expects the
global economy continue to expand.
Brent crude held steady near $112 a barrel on Tuesday as
investors remained cautious about Middle East supplies even as
Saudi Arabia ramped up production to cover a drop in Libyan
exports.
A sustained period of higher oil prices would significantly
affect developing economies but is unlikely to derail their
strong recovery since the global financial crisis, a senior
World bank economist said.
Separately, the IMF warned extended higher oil prices would
hit world growth.
Spot silver edged up 0.1 percent at $33.84 an ounce,
having touched an intra-day high at $33.94. It hit a 31-year
high at $34.30 last week.
Precious metals prices 0339 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1411.00 0.15 +0.01 -0.60
Spot Silver 33.84 0.04 +0.12 9.66
Spot Platinum 1806.99 2.00 +0.11 2.23
Spot Palladium 796.97 2.50 +0.31 -0.32
TOCOM Gold 3735.00 12.00 +0.32 0.16 27419
TOCOM Platinum 4835.00 -12.00 -0.25 2.96 8127
TOCOM Silver 88.90 1.60 +1.83 9.75 1362
TOCOM Palladium 2115.00 10.00 +0.48 0.86 153
COMEX GOLD APR1 1411.90 2.00 +0.14 -0.67 3784
COMEX SILVER MAR1 33.86 0.06 +0.17 9.44 80
Euro/Dollar 1.3806
Dollar/Yen 82.01
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Ed Lane)
Reuters
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