(Updates prices)
By Lewa Pardomuan
SINGAPORE, April 2 (Reuters) - Gold regained strength on
Wednesday as a fall in prices to two-month lows in the previous
session provided bargain hunters and investors in Asia a window
of opportunity to snap up the metal.
A 3 percent fall in prices on Tuesday took overall losses
to 15 percent since gold hit a record high of $1,030.80 last
month, making bullion attractive for Asian physical dealers and
triggering a rush for gold bars on fears that the market could
rebound soon.
"We believe the overall environment for gold still remains
positive over the forthcoming months," said Investec Australia
in a report.
"The dollar is not expected to rise markedly against the
euro given the likelihood of continuing poor U.S. economic data
and that global inflationary pressures still persist."
Gold <XAU=> hit a high of $890.50 an ounce, up from
$884.20/885.40 late in New York. It fell to a two-month low of
$872.90 on Tuesday, well below a record high of $1,030.80 hit
on March 17, after a rise in the dollar spurred selling. The
precious metal is up around 23 percent this year.
Dealers reported a shortage of gold bars in Southeast Asia
and Hong Kong, after investors and jewellers snapped up
bullion, especially during the first round of the sell-off
which took place a few days after the price struck its peak.
"There's a shortage of physical gold bars. There's a supply
squeeze at the moment," said William Kwan, a dealer at Phillip
Futures in Singapore.
"If we don't breach $850, the market can reverse. It would
take time. It's still subjected to the downside risk," said
Kwan, who pegged resistance at $902.
Record high oil prices above $100 a barrel and expectations
of further interest rate cuts in the United States had
propelled bullion to its record high.
The dollar extended gains on hopes the latest rash of bank
writedowns has marked the worst of the credit crisis, but
analysts said the U.S. currency may be in for renewed selling
unless upcoming data paints a sunnier picture of the economy
[]
Federal Reserve Chairman Ben Bernanke is scheduled to
testify on the economic outlook on Wednesday, while U.S.
employment data is due on Friday.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange added $4.6 an ounce to
$892.4 an ounce.
"Physical buying continues, and we've seen demand from
Indonesia, Thailand and some from Vietnam. The price is now
below $900, so I expect India to buy more," said a dealer in
Singapore, referring to the world's main consumer.
"We are still offering gold bars at a premium of 40 U.S.
cents an ounce, but it may go up to around 75. I don't remember
when it last touched that level. It was ages ago."
For details on gold bars in Asia, click on <GOLD/ASIA1>
Spot platinum <XPT=> jumped to $1,935/1,945 an ounce from
$1,918/1,928. It dropped to a one-week low of $1,888 on
Tuesday.
Most active February 2009 Tokyo platinum futures <0#JPL:>
rose 137 yen per gram to 6,229 yen, having hit limit down on
Tuesday.
Silver <XAG=> edged up to $16.94/16.99 an ounce from
$16.81/16.86 an ounce. It fell to its lowest since Feb. 6 at
$16.32 on Tuesday.
Spot palladium <XPD=> was unchanged at $435/440 an ounce.
Precious metals prices at 0758 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 887.50 4.40 +0.50 6.58
Spot Silver 16.94 0.08 +0.47 14.69
Spot Platinum 1935.00 17.00 +0.89 27.30
Spot Palladium 435.00 0.00 +0.00 18.21
TOCOM Gold 2933.00 32.00 +1.10 -4.15
81159
TOCOM Platinum 6217.00 125.00 +2.05 16.45
28939
TOCOM Silver 560.20 14.80 +2.71 3.55
1352
TOCOM Palladium 1453.00 54.00 +3.86 7.55
2893
Euro/Dollar 1.5608
Dollar/Yen 101.93
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)
