* Geithner open to SDR-linked currency system
* SPDR holdings jump to record 1,124.99 tonnes
* Gold market eyes equities, dollar
(Recasts after Geithner, adds comment, detail)
By Paul Lauener
LONDON, March 25 (Reuters) - Gold prices spiked up on
Wednesday as the dollar fell after U.S. Treasury Secretary
Timothy Geithner talked about a SDR-linked currency system.
Geithner said he was "quite open" to China's suggestion of
moving towards a currency system linked to the International
Monetary Fund's Strategic Drawing Rights (SDRs). []
That hit dollar sentiment as it could mean countries selling
large portions of their dollar reserves, analysts said.
Spot gold <XAU=> hit a session high of $940 an ounce.
"The dollar came off after Geithner's comments," said Eugen
Weinberg, analyst at Commerzbank. "Gold gained on the dollar."
A weaker U.S. currency makes metals priced in dollars
cheaper for holders of other currencies. []
However gold fell back when Geithner later said the dollar
would remain the world's reserve currency for a long time. Gold
was bid at $926.60 an ounce at 1438 GMT, up from $925.65 late in
New York on Tuesday []
Gold used as a hedge against financial uncertainty has come
under pressure in recent days as stock markets rallied on
optimism about the U.S. government's drive to clean up bad loans
held by banks. []
It is up about 5 percent from a six-week low of $882.90 hit
on March 18, but is still more than 7 percent shy of
the 11-month high above $1,000 set in February. It soared to an
all-time peak of $1,030.80 in March 2008.
Investors piled into gold in recent months as the financial
crisis escalated, the dollar tumbled and markets started to
worry about price pressures in the pipeline because of the vast
amounts of money being pumped into economies.
"We believe that the aggressive credit easing by U.S.
authorities has come with the risk of a huge expansion in
liquidity, and with it inflationary concerns that could prove
to be positive for gold further ahead," Barclays Capital said.
Strong interest can be seen in the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
which said its holdings rose to a record 1,124.99 tonnes on
March 24, up 10.7 tonnes from the day before.[]
For details on the gold holdings of the ETF listed in New
York and co-listed on other exchanges, click:
http://www.exchangetradedgold.com/iframes/usa.php
For a graphic, click:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD240309.jpg
Spot silver <XAG=> was bid $13.41 an ounce from $13.40 an
ounce on Tuesday, palladium <XPD=> at $205 from $205.50 and
platinum <XPT=> at $1,111 from $1,114.
Platinum used in autocatalysts to clean car emissions has
tumbled alongside deteriorating sales in the auto sector. Prices
have halved since a record $2,290 in March 2008.
(Additional reporting by Pratima Desai)
(Editing by Keiron Henderson)
