* Markets await U.S. stimulus, bank rescue plans
* SPDR Gold ETF hits fresh record
(Updates prices, adds detail of platinum rise)
By Jan Harvey
LONDON, Feb 10 (Reuters) - Gold edged higher on Tuesday,
supported by safe-haven buying and firmer oil prices, but
traders largely stuck to the sidelines ahead of a major economic
stimulus plan due to be announced in the United States.
Spot gold <XAU=> was quoted at $898.80/900.80 an ounce at
1237 GMT, against $895.00 an ounce late in New York on Monday.
"Everyone is waiting to see whether the fiscal stimulus plan
is passed and what its final shape and colour will be," said
Calyon metals analyst Robin Bhar.
"The Treasury Secretary speaks at the same time, so as well
as announcing the stimulus package there are going to be further
details of the bank rescue plan," he added.
The Obama administration's more than $800 billion stimulus
package is expected to be passed by the Senate later this
session, while U.S. Treasury Secretary Timothy Geithner is due
to unveil a plan to rescue stricken banks at 1600 GMT.
[]
Analysts say the passing of the stimulus plan could result
in an increased supply of debt via U.S. government bonds, which
could cap gold prices.
U.S. Treasury debt yields have risen as the market has
braced itself for an increase in supply of bonds. []
"Traditional monetary theory implies that gold is likely to
trade inversely with Treasury yields," HSBC analyst James Steel
said in a note.
"Higher interest rates raise the opportunity cost of owning
gold and reduce bullion's relative attractiveness in comparison
to interest-bearing instruments."
However, the stimulus plan could also raise fears over
inflation, which would be positive for bullion, and in the short
term could boost commodities as an asset class.
Among other commodities, oil prices firmed nearly 4 percent
lifted by expectations the government's stimulus plan could
boost demand. []
The dollar gained broadly on Tuesday as investors sought the
perceived safety of the U.S. currency before the government
announces a plan to shore up its ailing banking sector.
[]
A stronger dollar against the euro typically weighs on gold,
which is often bought as a hedge against weakness in the U.S.
currency. However, the two assets have recently shrugged off
their usual negative correlation.
Investment demand for gold is supporting the precious metal.
The world's largest exchange-traded fund, the SPDR Gold Trust
<GLD>, said its holdings rose to a record 881.87 tonnes on
February 9. []
Rising ETF investment has taken up some of the slack caused
by weaker jewellery demand in recent weeks. Indian buyers are
waiting for a fall in prices before making purchases, dealers
said. []
Among other precious metals, platinum <XPT=> broke back
above $1,000 an ounce to trade at $1,029.50/1,034.50 an ounce,
against $988 late in New York on Monday.
The metal has benefited from fund buying and interest in
platinum-backed ETFs, dealers say, while there is market talk of
buying by a European carmaker.
Investors are also turning their attention to the outlook
for supply, after recent focus on falling demand.
"The announcement of Anglo Platinum yesterday that they may
lay off as much as 10,000 people was seen as bullish," said one
trader. []
South Africa, source of 80 percent of the world's platinum,
expects the metal price downturn to worsen, hitting the economy
through capital flight and job losses, Minerals and Energy
Minister Buyelwa Sonjica said. []
"The industry is suffering but more so the smaller players,"
Sonjica said. "We are seeing smaller mines closed down, bigger
ones reducing their capital injection and in the process
much-needed jobs being lost."
Among other precious metals, palladium <XPD=> rose to
$210.50/214.50 an ounce from $205, while silver <XAG=> was at
$12.99/13.07 an ounce against $12.83.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
