* Euro's slide prompts fund selling in gold
* Selling countered by physical buying from Asia
* SPDR Gold holdings remain unchanged
By Chikako Mogi
TOKYO, Jan 29 (Reuters) - Gold prices moved away from near
three-month lows on Friday but remained pressured, hurt by a
rising dollar and waning risk appetite among investors.
The euro's extended fall against the dollar to its lowest in
more than six months helped lift the U.S. currency to a
five-month high against a basket of key currencies on Friday.
The weakness in the single European currency prompted funds
to further trim their long positions in gold, but Thursday's drop
in gold prices to their lowest level since Nov. 3 was spurring
buying from across Asia.
"Concerns about waning risk appetite and the euro's slide are
playing against gold, but at the same time lower prices are
attracting physical buyers widely from Asia, particularly China,"
said Koichiro Kamei, managing director at research firm Market
Strategy Institute in Tokyo.
"The gold market is seen as the easiest in which to hunt for
bargains as there's a perception that tightening measures in
China are primarily aimed at speculative buying in the real
estate sector," he said.
Reflecting healthy buying interest in China, premiums for
gold bars in Asia were seen from 50 cents to as much as $1 to
spot London prices, Kamei said. []
Demand is expected to remain strong ahead of China's Lunar
New Year next month, while seasonal demand picks up in India in
February and March, lending support to the market, he said.
Spot gold <XAU=> fell 0.4 percent to $1,082.80 per ounce as
of 0237 GMT, compared to New York's notional close of $1,086.75.
Spot gold hit a low of $1,073.75 on Thursday, the weakest since
Nov. 3.
At current levels, gold was set for a weekly drop of about 1
percent.
U.S. gold futures for April delivery <GCJ0> inched down 0.1
percent to $1,083.70 per ounce, compared to $1,084.80 an ounce on
the COMEX division of the NYMEX.
Gold fell to a near three-month low on Thursday, hit by a
stronger dollar and uncertainty over how President Barack Obama's
proposal last week to limit risk taking by U.S. banks might
impact gold trading. Obama renewed his calls for robust Wall
Street reform in his annual State of the Union address on
Wednesday.
The dollar rose broadly on Friday as investors remained
anxious about the fiscal health of Greece and other small euro
zone countries. []
Gold market traders said they were watching whether bullion
would diverge from the euro's movement and focus more on the
positive prospect of physical buying at current price levels.
Reflecting weak market sentiment, investment in gold has
paused.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,111.922 tonnes as
of Jan. 28, unchanged from the previous business day. []
Precious metals prices at 0243 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1082.85 -3.90 -0.36 -1.17
Spot Silver 16.16 -0.04 -0.25 -3.98
Spot Platinum 1509.50 1.50 +0.10 2.90
Spot Palladium 414.00 -4.50 -1.08 2.10
TOCOM Gold 3140.00 -29.00 -0.92 -3.65 58191
TOCOM Platinum 4349.00 -22.00 -0.50 -0.73 14981
TOCOM Silver 47.60 -1.00 -2.06 -7.93 462
TOCOM Palladium 1191.00 2.00 +0.17 2.23 295
Euro/Dollar 1.3933
Dollar/Yen 89.90
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Watson)
