RTRS: Gold slips 1 pct on dollar, below 6-week high
By Lewa Pardomuan
SINGAPORE (Reuters) - Gold fell 1 percent on Wednesday after the U.S. dollar bounced against the euro and prompted selling from investors, whose appetite for safe-haven assets was somewhat restored after bullion regained $800 an ounce.
Gold rallied to a six-week high around $830 on Tuesday after the Federal Reserve announced a new programme to support consumer debt securities, but profit taking erased some of the gains. "Year-end is coming, so the jewellery and industrial sectors try to reduce inventories. They don't want to buy for the time being. They still want to keep more cash," said Dick Poon, manager of precious metals at Heraeus Ltd in Hong Kong.
Gold was trading at $813.55 an ounce, down $6.30 an ounce from New York's notional close. The price has rebounded more than 19 percent since hitting a 13-month low of $680.80 in October but it is still below a record of $1,030.80 hit in March.
"People are slightly positive but not rushing to buy," said Adrian Koh, analyst at Phillip Futures in Singapore.
"The large and quick spike over the past couple of days has pushed gold prices up by almost $100 in a short period of time," he said.
The dollar gained against the euro as scepticism lingered over whether the latest U.S. measures to boost consumer lending would ease concerns about the financial crisis.
Weaker equities also prompted some investors to cash in gold to cover losses. Japan's Nikkei average slipped 1.3 percent on fears of a worsening economic outlook.
But some analysts said gold could find support around the current levels on demand from investors. The U.S. Mint said all 2008-dated bullion coins, with the exception of the American Eagle gold one-ounce and silver one-ounce bullion coins, have been depleted due to high demand.
Holdings at the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, were steady at 755.06 tonnes this week, within sight of a record of 770.64 tonnes in early October.
"My impression is that the gold price will gradually get better, mainly because of the actual buying on the ETF," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
But gold could also find stiff resistance at higher levels, with movements in oil prices likely to offer direction. "At this moment, oil is the most important factor for gold," he said.
Oil edged above $51 a barrel on Wednesday, after falling nearly 7 percent in the previous session on worries of falling demand after a government report showed the U.S. economy shrank more than estimated during the third quarter.
Fears about rising inflation helped push gold to a record high in March.
Platinum traded at $864.50 an ounce, up $4.50 from New York's notional close.
New York gold futures fell $4.8 an ounce to $813.70.