* Gold to revisit $1,410 -technicals
* Coming Up: U.S. existing home sales Jan; 1500 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Feb 23 (Reuters) - Gold slipped below $1,400 an ounce on
Wednesday as early bargain hunting subsided, equity markets fell and holdings in
ETF hit their lowest in nine months, but the prospect of safe-haven buying
prompted by escalating tension in the Middle East and North Africa could offer
support.
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 $1,399.54 an ounce by 0654 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.
"For the rally to continue, I think we need to cross $1,410. If that level
is breached, then gold may hit a new high," said a dealer in Singapore.
"But my concern is the ETF ... the volume is not picking up. Technically,
the market seems overbought. These are some of the factors which could somewhat
cap the upside for gold going forward. What really matters is whether the
tension in the Middle East will escalate further."
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.
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.
"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.
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 hardly moved at $1,400.7 an ounce.
Silver steadied after falling from a 31-year high on Tuesday.
Platinum and palladium rebounded on bargain hunting, having fallen
sharply on Tuesday to track declines in equities and base metals.
In other markets, Japan's Nikkei average extended losses on Wednesday as
investors pull out of riskier assets, with turmoil in Libya driving crude oil
prices near 30-month highs and sparking worries about slower global growth.
High oil prices raised fears of inflation and boosted gold's safe haven
appeal, but could also encourage countries to raise interest rates, which would
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 0654 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1399.54 0.34 +0.02 -1.40
Spot Silver 32.83 -0.21 -0.64 6.38
Spot Platinum 1798.50 10.00 +0.56 1.75
Spot Palladium 809.22 6.99 +0.87 1.22
Euro/Dollar 1.3716
Dollar/Yen 82.64
(Reporting by Lewa Pardomuan; Editing by Clarence Fernandez)
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