* Price resilience after Friday's dip cheers investors
* SPDR gold ETF holdings rise more than 2 tonnes
(Updates throughout, changes dateline from TOKYO)
By Jan Harvey
LONDON, Dec 1 (Reuters) - Gold hit record highs near $1,200
an ounce on Tuesday as dollar weakness fuelled buying of the
metal as an alternative asset, while investors speculating on
further gains were cheered by its recovery from Friday's lows.
Spot gold <XAU=> hit a peak of $1,198.70 an ounce and was
bid at $1,194.90 an ounce at 1021 GMT, against $1,179.10 late in
New York on Monday.
"The fact that we are seeing the dollar weaken is helping to
drive gold," said Ole Hansen, senior manager at Saxo Bank.
He said investors had been cheered by the strength of gold's
recovery after it fell to below $1,140 an ounce last week, with
the fall being met with strong fund buying.
"Everyone was waiting for that correction, and the way gold
recovered suggested there was a lot of buying lurking in the
wings (among) people who missed the opportunity to get into the
market in the first place," said Hansen.
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange also hit a record
$1,200.50 an ounce and were later up $13.70 at $1,196 an ounce.
The dollar index <.DXY>, which tracks the U.S. currency's
performance against a basket of six others, fell on Tuesday as
more clarity about Dubai's debt situation eased some concerns
over the region's stability, lifting risk appetite. []
The dollar also pared gains against the yen after comments
from the Bank of Japan on monetary policy.
Weakness in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Other commodity prices also firmed on the back of the weaker
dollar, with base metals firming and oil rising more than half a
percent to nearly $78 a barrel. [] []
Gold tends to track crude prices, as the metal can be bought
as a hedge against oil-led inflation.
GOLD ETF HOLDINGS RISE
In the physical market, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, said its
holdings rose 2.134 tonnes to 1,129.994 tonnes as of Nov. 30.
[]
Indian gold offtake abated on Tuesday as prices resumed
their upward trend, after a modest pick-up in the last few
sessions when traders stocked up in anticipation of wedding
demand. []
Jewellers in India, the world's largest gold consumer,
returned to the physical market after bullion fell from a record
on Friday. Sales of scrap persisted in other parts of Asia on
Tuesday, cutting premiums, dealers said. []
Analysts say they expect the gold market to continue taking
support from fund and other investment demand, and further
buying from central banks.
News in early November that the Reserve Bank of India had
bought 200 tonnes of gold, closely followed by acquisitions by
Russia, Sri Lanka and Mauritius, sparked a 13 percent price rise
that month.
"We expect to see further announcements of Central Bank gold
purchases over the coming months as these banks realign their
U.S. dollar and other asset holdings," said Fairfax analyst John
Meyer in a note.
On the supply side, Harmony Gold Mining Co. <HARJ.J>, the
world's No. 5 producer of the metal, said output was suspended
on Tuesday at its Merriespruit 3 shaft in South Africa after a
mineworker was killed the day before. []
Among other precious metals, spot silver <XAG=> was bid at
$18.70 an ounce against $18.45.
Platinum <XPT=> was at $1,468 an ounce against $1,452, while
palladium <XPD=> was at $378 against $363.50, having earlier
touched a high of $379 an ounce, its firmest since August 2008.
(Editing by Sue Thomas)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
