(Refiles to clarify, fix typo in second paragraph)
* President Obama's plan on bank trading dampens sentiment
* Dollar recovers after rising against euro on Greece woes
* SPDR gold ETF holdings steady but down in 2010 so far
(Recasts, updates comments, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Jan 21 (Reuters) - Gold prices fell to
$1,100 an ounce on Thursday, hitting their lowest level this
year, as U.S. President Barack Obama's plans to limit banks'
risk taking dampened investor sentiment across the board.
Gold remained under pressure after the White House proposed
stricter limits on financial risk-taking, aimed to shore up the
president's own political base, that sent bank shares lower.
[]
"Certainly it takes a toll on all investments products,
especially commodities, since the banks were very heavily
invested in the sector," said Zachary Oxman of California-based
TrendMax Futures.
Oxman said that the U.S. administration's proposal could
restrict capital flow and cut profits of banks, which provide
the needed liquidity for gold and commodities investors.
Spot gold <XAU=> hit a low of $1,088.30 an ounce and was
last at $1,101.10 an ounce at 1:24 p.m. EST (1824 GMT), against
$1,111.10 late in New York on Wednesday.
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange settled down $9.40
at $1,103.20 an ounce.
Earlier in the session, the euro slumped to a nearly
six-month-low due to concerns over a swelling budget deficit in
Greece, which sparked worries about debt held by several other
euro zone countries. []
Bullion later rebounded from its session lows as the Obama
proposal weighed down sharply on the dollar.
Daniel Major, an analyst at RBS Global Banking & Markets,
said gold could fall further due to a resurgent dollar.
"There have been some reasonably positive signs from the
jewelry market, but from the investment side, in the last two
or three weeks, we have seen modest but persistent redemptions
from the exchange-traded funds," Major said.
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, were steady on
Wednesday, but are down 21.7 tonnes or 1.9 percent this year.
In the same period of 2009, they rose 22.7 tonnes.
Holdings of the main silver ETF, the iShares Silver Trust
<SLV>, have also fallen 154 tonnes in 2010 to date.
Traders say some investors with an interest in precious
metals ETFs are pulling money out of the SPDR and the iShares
fund in favor of new U.S. platinum- and palladium-backed ETFs.
STOCK MARKET SLIPS
Wall Street fell as much as two percent after Obama's
proposed rules to prevent the biggest banks from taking
excessive risks.[] []
In India, historically the world's largest consumer of
gold, traders continued to buy as prices hit new two-week lows,
and that provided underlying support to prices.
Among other precious metals, spot platinum <XPT=> was at
$1,596 an ounce versus $1,622.50, while palladium <XPD=> was at
$453.50 versus $465.
Lease rates for the two metals have risen steadily since
the launch of the ETFs operated by a U.S. unit of London's ETF
Securities, dealers said.
Silver <XAG=> was at $17.50 an ounce against $17.87,
following gold lower.
(Reporting by Frank Tang and Jan Harvey; Editing by Marguerita
Choy)
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCG0> 1103.20 -9.4 -0.8 1096.20 0.6
US silver <SIH0> 17.510 -0.370 -2.1 16.845 3.9
US platinum <PLF0> 1587.10 -24.00 -1.5 1471.00 7.9
US palladium <PAH0> 453.95 -8.10 -1.8 408.85 11.0
Prices at 1:53 p.m. EST (1853 GMT)
Gold <XAU=> 1101.40 -9.70 -0.9 1096.35 0.5
Silver <XAG=> 17.49 -0.38 -2.1 16.84 3.9
Platinum <XPT=> 1596.00 -26.50 -1.6 1465.50 8.9
Palladium <XPD=> 453.50 -11.500 -2.5 405.50 11.8
Gold Fix <XAUFIX=> 1108.25 4.25 0.4 1104 0.4
Silver Fix <XAGFIX=> 17.68 -80.00 -4.3 16.99 4.1
Platinum Fix <XPTFIX=> 1612.00 9.00 0.6 1466 10.0
Palladium Fix<XPDFIX=> 462.00 0.00 0.0 402 14.9
