RTRS:PRECIOUS-Gold steadies near lifetime high, econ worries linger
* Spot gold eyes $1,796 -technicals
* Coming Up: U.S. Federal budget, July; 1800 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Aug 10 (Reuters) - Gold held steady on Wednesday,
hovering near a lifetime high around $1,778 an ounce struck in
the previous session, but further gains could be capped by a
rebound in equities after the U.S. Federal Reserve's vow to keep
rates near zero.
Stocks bounced in Asia after U.S. shares jumped on the
Federal Reserve's unprecedented pledge to keep interest rates
near zero for at least two years, although the move confirmed
fears the U.S. economy will remain weak for far longer than
previously forecast.
Gold added $6.91 to $1,750.31 an ounce by 0620 GMT,
having hit a record at $1,778.29 on Tuesday, in its biggest
three-day rally since the financial crisis in late 2008 after
equities plunged on fears over the threat to economic growth
from the U.S. and euro debt crises.
"Generally speaking, the panic is subsiding for the moment.
I would expect that (gold) will consolidate at these levels for
a while before we get any sort of clear idea of the sort of next
major moves," said Citigroup analyst David Thurtell.
"I think there are enough concerns about sovereign debts
and weakening growth, that people will buy dips, so it should
remain supported."
U.S. December gold futures GCcv1 rose $9.5 to $1,752.5 an
ounce, within sight of Tuesday's record of about $1,782 an
ounce.
Tracking strong global prices, the most active gold contract
on the Tokyo Commodity Exchange, June 2012 JAUc6, hit a record
for a second consecutive day at 4,408 yen a gram.
Global stock markets had been tumbling since the start of
August on fears the United States would slide back into
recession after a downgrade of the U.S. credit rating on Friday,
and on the ever-expanding euro zone debt crisis.
MSCI's all-country world stock index was
about 17 percent below its May peak on Wednesday, after slipping
as far as 20 percent, the generally accepted definition of a
bear market, on Tuesday.
"We'll wait and see if stocks markets will continue to
stabilise, because if they will, then gold will drop down a
bit," said a physical dealer in Hong Kong.
"But I think there's no change in sentiment for gold.
Interest rates in the U.S. will be kept low in the next two
years and it should benefit gold for the time being."
Premiums for gold bars remained steady in Singapore and Hong
Kong, while dealers in Tokyo were offering excess gold bars to
trading houses in Southeast Asia after record bullion prices
triggered selling in Japan.
Gold bars were quoted at a discount of 25 cents in Tokyo.
"The general public has been selling back their gold, so
that's why we are offering gold bars not only to Singapore, but
also to other countries in Southeast Asia," said a physical
dealer in Tokyo.
"Southeast Asia is still buying gold at this moment."
Vietnam approved 5 tonnes of gold imports on Tuesday and
could double the quantity soon as surging prices touched off a
frenzy at gold dealers and jewellers.
High bullion prices blunted demand in main consumer India,
but a correction could prompt bargain hunting from jewellers as
the busy wedding season resumes later this month.
Gold jewellery is an essential part of the dowry basket
parents give daughters at Indian weddings.
In the energy market, Brent crude rose more than $3 on
Wednesday after the Fed promised to extend near-zero interest
rates for two more years.
