* Central banks to scale back emergency lending
* Traders says gold sell-off a healthy correction
(Recasts, adds comment)
By Rebekah Curtis and Pratima Desai
LONDON, Sept 24 (Reuters) - Gold prices tumbled on Thursday
in a sell-off triggered by the dollar's rise after major central
banks including the U.S. Federal Reserve announced plans to
scale back some emergency lending facilities.
Spot gold <XAU=> fell to $992.60 an ounce, the lowest since
September 15. It was bid at $997 at 1506 GMT compared with
$1,007.05 late in New York on Wednesday.
The dollar recovered from earlier losses after major central
banks announced plans to scale back massive injections of
dollars into their banking systems in a sign that removal of
monetary stimulus was already underway. []
"The dollar bounced back and gold rose," said Michael
Kempinski," a trader at Commerzbank. "It's a healthy correction
... some investors were disappointed that gold hasn't broken
higher, but it did rise too fast."
A higher dollar makes commodities priced in the U.S.
currency more expensive for holders of other currencies.
However prices remained within sight of last week's 18-month
high at $1,023.85 and the March 2008 historic peak at $1,030.80.
"Dollar weakness is part of why we're sat where we are,"
Standard Bank analyst Walter De Wet said. "There's going to be
more dollar weakness as we head towards the end of the year. So
we see more upside in gold in the fourth quarter."
The precious metal hit a session high of $1,018.50 an ounce
as the dollar fell against the euro after weekly data from the
United States showed an unexpected fall in new claims for
jobless benefits. [] []
Traders said falling crude <CLc1> prices were also weighing
on gold, used as a hedge against inflation, which is often
triggered by rising oil prices.
HEDGE AGAINST RISK
Some analysts said gold would draw support from resilient
demand in the physical market in Asia.
"Despite high prices physical demand seems to be recovering
a bit," said Eugen Weinberg, an analyst at Commerzbank.
"Together with higher investment interest, it's providing a good
picture."
India's gold purchases have picked up as the festive season
gathers pace in the world's largest consumer.
"At the moment we see signs of scarcity in some places,"
Weinberg said of the physical market in Asia. "It's surprising
that some places need to wait some weeks for their deliveries."
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,101.735
tonnes as of Sept 23, unchanged from the previous business day.
Among other precious metals, silver <XAG=> was bid at $16.28
from $16.71, platinum was at $1,303 from $1,318.5 and palladium
at $290 from $292.
Traders said precious metals alongside other asset markets
was waiting to hear the conclusions from the G20 summit in
Pittsburgh on Thursday and Friday. []
The timing for plans to unwind emergency economic support is
a key issue for investors as the G20 leaders seek ways to
nurture the recovery from the recession and build safeguards
against future catastrophes. []
(Additional reporting by Pratima Desai; editing by William
Hardy)
