* Gold drops 1.5 pct on margin selling; oil, stocks fall
* Cash need offsets safe haven despite Libya, EU debt fear
* Bullion weighed down by jitters ahead of EU summit
* Coming up: US retail sales, consumer sentiment Friday
(Rewrites, adds comments, updates prices)
By Frank Tang
NEW YORK/LONDON, March 10 (Reuters) - Gold lost more than 1
percent on Thursday, set to post its biggest one-day loss in
about six weeks, as the dollar rallied and investors sold
bullion to cover losses in equity and other commodity markets.
Gold retreated from its record high of $1,444.40 an ounce
set earlier this week, as a cross-asset sell-off accelerated on
Thursday. Both Wall Street and oil fell sharply after an
unexpected Chinese trade deficit and renewed euro zone debt
jitters fueled global growth concerns. []
(Graphic: http://link.reuters.com/waz48r)
The need to raise cash more than offset any safe-haven
buying in gold, even as a downgrade of Spain's credit rekindled
worries about the euro zone debt crisis. []
"Spain's downgrade is clearly helping the dollar at this
point. A few weeks ago, the story was everybody rushing into
gold rather than the dollar, and now the tide seems to have
shifted a bit," said Peter Buchanan, senior economist of CIBC
World Markets.
Ongoing violence in Libya and rising political unrest
across the Arab world also failed to lift gold despite worries
about global economic growth because of oil's spike.
Spot gold <XAU=> fell as low as $1,402.72 an ounce, a
two-week low, and was later down 1.6 percent at $1,406.20 an
ounce by 12:45 p.m. EST (1745 GMT). U.S. gold futures for April
delivery <GCJ1> fell 1.6 percent to $1,406.30.
On charts, spot bullion bounced off support after briefly
falling below its 20-day moving average.
Tom Pawlicki, precious metals and energy analyst at futures
broker MF Global, cited technical selling as gold this week has
failed to clear key resistance at $1,435 an ounce -- the upper
trendline of a long-term rising channel dated back from 2008.
Gold was hit as the dollar rose 0.5 percent against the
euro after Moody's downgraded Spain to Aa2 from Aa1 with a
negative outlook, leaving the euro vulnerable to more downward
pressure in the coming weeks. []
EYES ON EURO ZONE SUMMIT
Bullion investors will watch closely for possible
development out of a Friday summit of a group of 17 euro zone
leaders. The goal for the meeting is to boost competitiveness
and to quell the region's debt crisis. []
UBS said in a note that financial markets are likely to be
disappointed by the outcome of the European meeting, which
could benefit bullion.
"There is growing acceptance that Europe's debt crisis will
get worse before it gets better, as our fixed income
strategists maintain, and that this will be gold-positive," UBS
said.
Among other precious metals, silver <XAG=> fell 3.5 percent
to $34.79 an ounce.
Platinum <XPT=> slid 2.3 percent to $1,756.24 an ounce,
while palladium <XPD=> lost 1.8 percent to $762.97.
Prices at 12:45 p.m. EST (1745 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCJ1> 1406.20 -23.40 -1.6% -1.1%
US silver <SIK1> 34.820 -1.227 -3.4% 12.6%
US platinum <PLJ1> 1760.90 -41.10 -2.3% -1.0%
US palladium <PAM1> 766.15 -15.50 -2.0% -4.6%
Gold <XAU=> 1405.71 -23.08 -1.6% -1.0%
Silver <XAG=> 34.79 -1.26 -3.5% 12.7%
Platinum <XPT=> 1756.24 -40.25 -2.3% -0.7%
Palladium <XPD=> 762.97 -14.00 -1.8% -4.6%
Gold Fix <XAUFIX=> 1413.25 -11.00 -0.8% 0.2%
Silver Fix <XAGFIX=> 35.19 -98.00 -2.7% 14.9%
Platinum Fix <XPTFIX=> 1778.00 12.00 0.7% 2.7%
Palladium Fix <XPDFIX=> 769.00 1.00 0.1% -2.8%
(Reporting by Frank Tang; Editing by Lisa Shumaker)
