* 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 remained high, stoked by a
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 $851.00 an ounce, down $4.20
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 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 gold to cover losses.
Gold is still a long way off its record $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 diversification into gold."
Sterling and the euro recovered from earlier losses on
Wednesday but concerns persisted over losses in the UK banking
sector and a growing 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 <> slid 2 percent and
Asian stocks outside Japan <.MIAPJ0000PUS> shed 1.5 percent, in
sympathy with the Dow <> which fell below 8,000 for the
first time since late November 2008 after President Barack
Obama's inaugural address failed to disclose details of how he
planned to tackle the economic crisis. []
"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 at $941.00 an ounce, up $3.50 from New
York's notional close.
New York gold futures <GCZ9> fell $3.0 an ounce to $852.2
in electronic trade.
Precious metals prices at 0613 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 851.00 -4.20 -0.49 2.20
Spot Silver 11.17 0.06 +0.54 -24.37
Spot Platinum 941.00 3.50 +0.37 -38.09
Spot Palladium 183.50 1.50 +0.82 -50.14
TOCOM Gold 2469.00 48.00 +1.98 -19.31
29873
TOCOM Platinum 2737.00 -24.00 -0.87 -48.74
6173
TOCOM Silver 321.00 2.30 +0.72 -40.67
128
TOCOM Palladium 542.00 2.00 +0.37 -59.88
88
Euro/Dollar 1.2977
Dollar/Yen 89.84
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
