* Gold falls as firmer dollar and stocks weigh
* SPDR Gold Trust's <GLD> bullion holdings hits record
* Platinum hits 12-week high in correction from sell-off
(Updates prices, adds details, comments)
By Risa Maeda
TOKYO, Jan 7 (Reuters) - Gold fell on Wednesday as a stronger
dollar versus the euro and gains in share prices reduced
bullion's allure as an alternative asset, while platinum extended
its rise to a 12-week high.
Gold was underpinned late last year when demand concerns hit
many commodities including platinum, but these other commodities
are now recovering while gold is lagging behind, analysts said.
As of 0636 GMT, gold <XAU=> was down 0.3 percent to $861.15
an ounce from New York's notional close of $863.35.
On Tuesday, gold touched a two-week low of $838.55 in New
York, while the dollar extended its rally to a one-month high
against the euro.
"Gold came under pressure from a stronger dollar as well as
gains in U.S. shares. Behind them lie a sort of euphoria in the
U.S., or strong expectations for President-elect (Barack) Obama,"
said Tatsuo Kageyama, analyst at Kanetsu Asset Management.
"A gold rally above $900 now looks highly unlikely and
instead we should be prepared for a risk that it will test
further downside," he said.
A stronger dollar makes dollar-based gold more expensive for
holders of other currencies, while stock rallies often stoke
concerns about outflows of money from gold.
But some analysts said the downside may be limited as low
visibility on the prospects for the global economy could mean
more money is poured into gold as a safe haven.
Demand from exchange-traded funds, which issue securities
backed by physical gold, remained firm as the amount of bullion
held in the bank by the world's biggest gold ETF hit a record
high.
The SPDR Gold Trust <GLD> said it held a record 787.88 tonnes
of gold on Jan. 7, up 7.65 tonnes from the previous day.
[]
Market views will likely swing between optimism over
government spending plans and deepening gloom over the economic
reality, meaning financial markets may be stuck in narrow ranges
for a while, said Hitoshi Yamamoto, president at Fortis Asset
Management Japan.
"In the first six months of this year, I think there will be
unexpectedly stable prices in many financial markets. Prices from
currencies and stocks to commodities could be stuck in a boxed
range," Yamamoto said.
The dollar held onto the previous day's gains on Wednesday
amid hopes for an aggressive stimulus package from the Obama
administration. []
Persistent signs of economic weakness in the euro zone also
helped pushed the euro down against the dollar. []
U.S. gold futures were lower in Asia after rising about 1
percent in New York on Tuesday. Gold futures for February
delivery <GCG9> stood at $862.4 per ounce, down $3.6 or 0.4
percent from Tuesday's settlement on the COMEX division of the
New York Mercantile Exchange.
In contrast, cash platinum <XPT=> rose as high as $996.00 an
ounce, the highest since Oct. 15, helped by buybacks from
investors and extended gains in the Tokyo futures market.
Platinum later came off its highs and stood at $990.50 an
ounce, up 2.6 percent from $965.50 in New York.
The December platinum contract on the Tokyo Commodity
Exchange <0#JPL:> rose 163 yen per gram to 3,000 yen. The TOCOM
December gold <0#JAU:> gained 56 yen per gram to 2,599 yen.
Portfolio rebalancing prior to a scheduled index rejig by
commodity index funds tracking the Dow Jones-AIG Commodity Index
<.DJAIG> may have been supportive to gold and silver.
The Dow Jones AIG recalculates the weightings for the
individual commodities in its index yearly and is set to raise
the weightings for gold and silver later this week to next week.
[]
But analysts say such a technical effect would not last long
beyond the transition period.
Cash silver <XAG=> slipped to $11.31 an ounce from $11.44 in
New York. Palladium <XPD=> edged up to $196.5 an ounce from $196.
Precious metals prices at 0644 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 860.40 -2.95 -0.34 -2.24
Spot Silver 11.29 -0.15 -1.31 -0.27
Spot Platinum 990.50 25.00 +2.59 6.28
Spot Palladium 196.50 0.50 +0.26 6.50
TOCOM Gold 2599.00 56.00 +2.20 1.01 30845
TOCOM Platinum 2995.00 158.00 +5.57 12.93 14998
TOCOM Silver 338.90 12.90 +3.96 6.14 477
TOCOM Palladium 606.00 43.00 +7.64 10.18 606
Euro/Dollar 1.3519
Dollar/Yen 93.62
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
