* Euro slide prompts fund selling of 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 under pressure, hurt by
a rising dollar and waning risk appetite among investors.
The euro's extended fall against the greenback to its lowest
in more than six months helped lift the dollar 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 prices of the precious metal below $1,075 per ounce to
their lowest level since Nov. 3 was spurring buying from across
Asia.
"Concerns about waning risk appetite and the euro's slide
are going against gold, but at the same time lower prices are
attracting physical buyers 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.
In Asia, premiums for gold bars jumped to their strongest
since December 2008 as weaker bullion prices ignited buying from
investors and Chinese consumers ahead of the Lunar New Year
holidays, dealers said on Friday. [] []
Gold bars were offered in singapore at premiums of $1.10 an
ounce to spot London prices, up from 70 cents two weeks ago.
Market Strategy Institute's Kamei also 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.
Spot gold <XAU=> fell 0.4 percent to $1,082.15 per ounce as
of 0611 GMT, compared to New York's notional close of $1,086.75.
At current levels, gold was set for a weekly drop of about
0.9 percent and a 1.2 percent decline on the month.
U.S. gold futures for April delivery <GCJ0> inched down 0.2
percent to $1,082.80 per ounce, compared to $1,084.80 at
Thursday's close on the COMEX division of the NYMEX.
Spot gold marked a low of $1,073.75 on Thursday, the weakest
since Nov. 3, 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-backed
securities 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 since Jan. 19. []
Precious metals prices at 0607 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1081.65 -5.10 -0.47 -1.28
Spot Silver 16.14 -0.06 -0.37 -4.10
Spot Platinum 1504.00 -4.00 -0.27 2.52
Spot Palladium 417.00 -1.50 -0.36 2.84
TOCOM Gold 3134.00 -35.00 -1.10 -3.84 72759
TOCOM Platinum 4342.00 -29.00 -0.66 -0.89 18696
TOCOM Silver 47.20 -1.40 -2.88 -8.70 638
TOCOM Palladium 1197.00 8.00 +0.67 2.75 447
Euro/Dollar 1.3937
Dollar/Yen 89.85
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda)
