* Gold to revisit $1,410-technical
* Coming Up: U.S. Existing home sales Jan; 1500 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Feb 23 (Reuters) - Gold regained strength on Wednesday as bargain
hunters resurfaced after prices dropped from a seven-week high, but falling
equity markets and a drop in ETF holdings could cap gains despite the prospect
of safe-haven buying prompted by escalating tension in the Middle East and North
Africa.
A defiant Muammar Gaddafi said he was ready to die "a martyr" in Libya,
vowing to crush a growing revolt which has seen eastern regions break free of
his 41-year rule and brought deadly unrest to the capital.
Spot gold was steady at $1,399.66 an ounce by 0341 GMT after falling
as low as $1,395.20 an ounce and rising as high as $1,401.09. Bullion had risen
to a 7-week high around $1,410 on Tuesday before slipping, partly due to
declines in equities that prompted investors to sell gold to cover losses.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust
, said holdings dropped to 1,218.243 tonnes by Feb. 22, their lowest in
nine months, from 1,223.098 tonnes by Feb. 20.
"There's still bargain hunting at the lower end. This Middle East crisis
won't be easily solved in a short time. There are so many nations involved,"
said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
Protests in Libya's neighbours Egypt and Tunisia toppled entrenched leaders,
but Gaddafi said he would not be forced out by the rebellion sweeping through
his oil-producing nation.
In Bahrain, Shi'ite Muslim protesters filled streets in Manama on Tuesday
demanding the fall of the Sunni-run government in the biggest protest since
unrest began last week, while the return of a key opposition figure was delayed.
Spot gold may revisit Tuesday's high at $1,410.65 per ounce, as its
uptrend is steady, according to Wang Tao, a Reuters market analyst for
commodities and energy technicals.
For a 24-hrs gold technical outlook: http://graphics.thomsonreuters.com/WT/20112302092850.jpg
U.S. gold futures for April fell $4.3 to $1,396.8 an ounce.
Silver steadied after falling from a 31-year high on Tuesday.
Platimum and palladium rebounded on bargain hunting, having fallen
sharply on Tuesday to track declines in equities and base metals.
In other markets, Asian stocks were flat to slightly lower on Wednesday
after Wall Street's worst showing since August, and oil hovered near 2-1/2 year
highs.
High oil price raised fears of inflation, but it could also encourage
countries to raise interest rates, which could eventually curb demand for
commodities.
In China, the world's second-largest gold consumer after India, an annual
gathering of the country's congress is scheduled to take place in early March,
with inflation its top priority for discussion.
"The key threat to the gold market is an increase in real interest rates.
When these begin to rise, the opportunity cost of holding gold will encourage
investors to sell the metal," said BlackRock in a report.
Precious metals prices 0341 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1399.66 0.46 +0.03 -1.39
Spot Silver 33.02 -0.02 -0.06 7.00
Spot Platinum 1802.24 13.74 +0.77 1.97
Spot Palladium 807.75 5.52 +0.69 1.03
TOCOM Gold 3729.00 -28.00 -0.75 0.00 42848
TOCOM Platinum 4848.00 -113.00 -2.28 3.24 20971
TOCOM Silver 86.40 -1.80 -2.04 6.67 2315
TOCOM Palladium 2167.00 -116.00 -5.08 3.34 680
Euro/Dollar 1.3689
Dollar/Yen 82.62
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by David Fogarty)
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