* Gold eases on profit taking, off 2-week high
* ETF holdings hit record above 800 tonnes
* Oil edges up above $41 a barrel, Nikkei down 2 pct
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Jan 21 (Reuters) - Gold fell on profit-taking on
Wednesday after rising to its strongest in nearly two weeks the
previous day, but record holdings on the ETF suggested
investors' interest in the metal remains high, stoked by the
worsening financial crisis.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said it held arecord 802.90 tonnes of
gold by Jan. 20, up 7.65 tonnes from795.25 tonnes on Jan. 15.
[]
Gold <XAU=> was trading at $850.80 an ounce, down $4.40
from New York's notional close on Tuesday, when it defied a
rallying U.S. dollar and jumped to a high of $865.80 on safe
haven buying as UK banks suffered huge losses.
Bullion is now 6 percent above a one-month low of $801.65
hit last Thursday, when weak oil, a firming dollar and falls in
stock markets forced investors to sell bullion to cover losses.
Gold is still below a record of $1,030.80 struck last March.
"Sentiment is probably a little bit more positive now. It
may be particularly, I think, that worries about the economic
outlook will be factors providing some support for gold at the
moment," said David Moore, commodities strategist at
Commonwealth Bank of Australia.
"It's interesting the relationship with the U.S. and euro
rate didn't hold last night. I suspect that it reflected safe
haven, some diversification into gold."
Sterling hit a 7-1/2-year low against the dollar on
Wednesday, while the euro hit a 6-week trough on concerns over
losses in the U.K. banking sector and a deepening recession in
the euro zone. []
Oil <CLc1> inched up above $41 a barrel but fears about a
deep recession and weak demand weighed on sentiment. []
Gold could revisit $900, a level last seen in October, but
the gains would only scare off the jewellery sector, which
accounts for more than 60 percent of global demand for bullion,
said Moore of Commonwealth Bank of Australia.
"If gold did go above $900, and it's still a fair way off,
I am not sure if we would necessarily stay there. I wouldn't
rule it out, but at this stage, even if it did go above $900, I
am not sure it would be sustained."
In other markets, Tokyo's Nikkei share average <>
slipped more than 2 percent after the Dow Jones industrial
average <> fell below 8,000 for the first time since late
November 2008. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> shed 1.1 percent.
"From a technical perspective, after gold moved out of the
$850-$860 resistance, it now looks like it could retest the
previous highs around $880-$885, or even higher," said a dealer
in Singapore, referring to levels seen in early January.
"I was a bit surprised by the rally yesterday and safe
haven buying was the only factor bringing gold much higher," he
said.
Platinum <XPT=> was trading at $944.00 an ounce, up $6.50
from New York's notional close.
New York gold futures <GCZ9> fell $3.6 an ounce to $851.7
in electronic trade.
Precious metals prices at 0228 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 850.80 -4.40 -0.51 2.17
Spot Silver 11.15 0.04 +0.36 -24.51
Spot Platinum 944.00 6.50 +0.69 -37.89
Spot Palladium 182.50 0.50 +0.27 -50.41
TOCOM Gold 2470.00 49.00 +2.02 -19.28
21085
TOCOM Platinum 2741.00 -20.00 -0.72 -48.66
3785
TOCOM Silver 320.20 1.50 +0.47 -40.81
96
TOCOM Palladium 541.00 1.00 +0.19 -59.96
55
Euro/Dollar 1.2926
Dollar/Yen 89.98
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
