* Gold holds below $900/oz
* Stock rally dulls gold's sheen for risk-averse investors
By Miho Yoshikawa
TOKYO, March 11 (Reuters) - Gold was little changed on
Wednesday, hanging below $900, as investors took a break from
their aversion to risk amid a global stock market rally that has
eased fears about the economic crisis.
The precious metal fell below $900 for the first time in a
month on Tuesday as U.S. equities jumped from 12-year lows led by
financial stocks.
Japanese shares climbed on Wednesday, with the Nikkei average
jumping 4 percent after booking a 26-year closing low the
previous day. []
"On the one hand we've got a weakly U.S. dollar, which we
would have expected to benefit gold, but on the other hand of
course the very strong recovery -- temporary perhaps -- in the
stock market that has meant an unwinding of risk aversion," said
Darren Heathcote of Investec Australia.
The dollar dipped against the euro on Wednesday after a rally
in U.S. shares on news that Citigroup was profitable in the first
two months of 2009, tempering safe-haven buying of the dollar.
[]
Spot gold <XAU=> was at $896.20 an ounce as of 0539 GMT, up
0.04 percent from New York's notional close on Tuesday, after
moving between $891.55 and $898.60.
Gold is now down more than 10 percent from the 11-month high
above $1,000 marked on Feb. 20. It hit a record of $1,030.80 in
March last year.
Heathcote said gold was likely to consolidate around current
levels as the decline had not gained momentum after breaking
below $900.
"I would expect we'll see some consolidation, and much of the
focus (will be) on what happens across the various stock markets
in the coming days," he said.
Waning investor interest was also reflected in the relatively
steady volume in holdings of the world's largest gold-backed
exchange-traded fund, which had jumped by some 200 tonnes in the
first six weeks of the year, matching bullion's rally.
The SPDR Gold Trust <GLD> said holdings stood at 1,028.99
tonnes as of March 10, unchanged from March 8, when it edged down
from its record high of 1,029.29 tonnes for the first time since
January. []
UBS said in a research note on Tuesday that it believes gold
could hit $2,500 an ounce in the next five years if the dollar
weakens further and inflation volatility continues.
[]
The chief executive of Barrick Gold Corp <ABX.TO>, the
world's largest gold producer, said on Tuesday that industry
supply of the metal will continue to fall, and the price of gold
will remain volatile in the near term. []
Aaron Regent, Barrick's chief executive, was speaking at the
Reuters Global Mining and Steel Summit in New York on Tuesday.
Precious metals prices at 0550 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 896.30 0.50 +0.06 1.83
Spot Silver 12.61 0.04 +0.32 11.40
Spot Platinum 1045.00 5.50 +0.53 12.12
Spot Palladium 196.00 0.50 +0.26 6.23
TOCOM Gold 2848.00 -42.00 -1.45 10.69 48080
TOCOM Platinum 3313.00 24.00 +0.73 24.92 7568
TOCOM Silver 394.70 -3.50 -0.88 23.61 493
TOCOM Palladium 631.00 10.00 +1.61 14.73 362
Euro/Dollar 1.2676
Dollar/Yen 98.40
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda; Editing by Chris Gallagher)
