* Analysts expect prolonged correction in gold price
* Softer dollar helps support gold
* Speculation rife over further cenbank gold acquisitions
(Recasts, updates prices)
By Jan Harvey
LONDON, Nov 5 (Reuters) - Gold slipped on Thursday,
retreating from the record high it hit last session, as
disappointment over the metal's failure to breach $1,100 an
ounce prompted investors to cash in some gains.
But traders said a softer dollar against the euro after the
European Central Bank said the euro zone economy will recover
next year would help underpin prices, as it makes gold cheaper
for holders of other currencies. []
Spot gold <XAU=> was bid at $1,090.35 an ounce at 1644 GMT,
against $1,092.35 late in New York on Wednesday, when the
precious metal hit a record high of $1,097.25 an ounce.
But gold, boosted by a weaker dollar after a pledge from the
U.S. Federal Reserve to keep interest rates low on Wednesday,
failed to build on those gains.
"The fact that we didn't manage to go through $1,100 might
lead some investors to reconsider their positioning in the
sector," said Commerzbank analyst Eugen Weinberg.
"Should the dollar become stronger over the coming days I
would expect to see more profit taking," he added. "I think...
we will see a prolonged correction, because the trend of the
last few weeks is becoming a bit too pronounced."
U.S. gold futures for December delivery <GCZ9> on the COMEX
division of the New York Mercantile Exchange rose $3.1 to
$1,090.40 an ounce.
Weighing on gold were lower oil prices, which fell below $80
a barrel after a steep decline in U.S. crude inventories sent
prices up 1 percent in the previous day. Crude is widely seen as
the bellwether commodity. []
CENBANKS EYED
Speculation continued over the prospect of further central
bank gold acquisitions, after India's purchase of 200 tonnes of
bullion from the International Monetary Fund on Monday. The
report helped push gold to record highs. []
Sri Lanka's central bank said it had been buying gold for
the last five or six months as it diversifies its reserves amid
volatile markets. []
A former adviser to the People's Bank of China poured cold
water on the idea that the PBC will buy IMF gold, saying locally
sourced bullion would be cheaper. []
In the physical market, gold traders in India, the world's
biggest bullion consumer last year, reported poor demand as high
prices put off buyers. []
A report showed gold sales in Abu Dhabi fell by up to 30
percent in October on the year, as higher prices continued to
keep consumers at bay. []
Among other precious metals, spot silver <XAG=> was bid at
$17.41 an ounce against $17.44. Holdings of the world's biggest
silver-backed exchange-traded fund, the iShares Silver Trust
<SLV>, fell 3.85 tonnes on Wednesday. []
Platinum <XPT=> was at $1,354 an ounce against $1,364, while
palladium <XPD=> was at $326.50 against $327. The metals, used
mainly in autocatalysts, are both sensitive to car demand.
Toyota Motor Corp, the world's biggest carmaker by sales,
halved its annual loss forecast but failed to convince investors
it is back on track, as government subsidies peter out and a
strong yen takes its toll. []
(Additional reporting by Pratima Desai; editing by James
Jukwey)
