* Gold inches up to fresh seven-month peak
* SPDR Gold Trust holdings hit record-high 1,008.80 tonnes
* Bullion may test $1,000 in near term
By Chikako Mogi
TOKYO, Feb 18 (Reuters) - Gold prices inched up to hit a
fresh seven-month high on Wednesday, as growing concern over
the global economy redoubled investors' fervour for safe-haven
assets.
Global markets were roiled by a slew of grim reports
showing a slumping Japanese economy and contracting U.S.
economic activity as well as fears that Eastern Europe's
battered economies would drag down Western banks.
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The market was largely steady, however, as many players
took a break from the recent rally, traders said.
Spot gold <XAU=> was trading at $970.10 an ounce, up $1.75
from the notional New York close, after rising as high as
$973.50 an ounce to a fresh seven-month high. Gold rose as high
as $973.20 an ounce on Tuesday.
Gold futures for April delivery <GCJ9> on COMEX rose $5.5
to $973.0 an ounce, after touching a new seven-month high of
$975.4.
"It's holding up quite well, considering the move it had.
Macroeconomic pessimism that was evident in the New York
equities market is providing quite a strong support for gold,
for its safe-haven quality," said Toby Hassall, a research
analyst at Commodity Warrants Australia.
Reflecting the keen interest in gold, holdings at the
world's largest gold-backed exchange-traded fund, the SPDR Gold
Trust <GLD>, struck a record 1,008.80 tonnes on Tuesday, up 2.3
percent from Friday. []
For graphics on SPDR Gold holdings, click on:
https://customers.reuters.com/d/graphics/MKTS_SPDR180209.jpg
Global gold demand rose 4 percent to 3,569 tonnes in 2008
as increased investor demand outstripped jewellery and
industrial demand, which traditionally make up about two-thirds
of consumption, the World Gold Council said in a report on
Wednesday. []
Investors, expecting years of inflation and global economic
instability, are pouring money into securities backed by gold
bullion, helping to turn a simple safe haven into a mainstream
asset class.
Some traders said that physical flows may be caught between
waning demand for jewelry as recession takes a toll on
purchases of luxury items and healthy appetite from investors
eyeing gold jewelry as a way for cashing in when necessary.
In a research report, investment bank Goldman Sachs said
investors seeing the bottom of the collapse in commodities
prices drawing near should hang fire and remain focused on
equities, although it remained bullish on their long-term
outlook. []
U.S. equities <> slipped within a whisker of November's
bear-market low on Tuesday, with financial stocks diving to
14-year lows after Moody's Investors Service said banks could
be hit by the recession in Eastern Europe. []
On Wednesday, Japan's Nikkei <> fell 1.5 percent to
hit its lowest close in nearly 4 months as financial shares
sank as worries about European banks and credit concerns hit
property firms.
"The precious metals market will look to the equities
market for some support. If American equities extend losses
from recent lows, we may see $1,000 level tested in the near
term," said Hassall.
Bullion has rallied more than 40 percent since tumbling to
a 13-month low of $680.80 in late October, and is just 6
percent below a lifetime high of $1,030.80 struck last March,
when record oil and uncertainties in the dollar's outlook
spurred buying.
Prices
Precious metals prices at 0630 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 971.05 2.70 +0.28 10.33
Spot Silver 14.21 0.11 +0.78 25.53
Spot Platinum 1102.00 14.00 +1.29 18.24
Spot Palladium 216.00 -0.50 -0.23 17.07
TOCOM Gold 2895.00 41.00 +1.44 12.51
48381
TOCOM Platinum 3276.00 101.00 +3.18 23.53
12027
TOCOM Silver 419.80 11.40 +2.79 31.48
321
TOCOM Palladium 658.00 3.00 +0.46 19.64
323
Euro/Dollar 1.2606
Dollar/Yen 92.37
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 Clarence
Fernandez)
