* Price resilience after Friday's dip cheers investors
* SPDR gold ETF holdings rise more than 2 tonnes
(Updates prices, adds comment)
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
more gains were cheered by its recovery from last week's losses.
Spot gold <XAU=> hit a peak of $1,198.70 an ounce and was
bid at $1,192.15 an ounce at 1506 GMT, against $1,179.10 late in
New York on Monday.
Prices could push through the $1,200 an ounce level to new
record highs if the dollar continued to weaken, analysts said.
Significant downside risks to the price were unlikely to be
seen before January, said Michael Lewis, head of commodities
research at Deutsche Bank, with seasonal factors affecting the
dollar likely to drive gold higher in the short term.
"We see $1.55 in the euro-dollar, so that is where we think
the main catalyst is for new highs for gold," he said. "There is
normally quite a strong seasonal pattern in the dollar, (and
that) will be driving a further rally in gold."
The dollar fell against a basket of six other currencies
<.DXY> on Tuesday as waning worries about Dubai's debt,
Australia's interest rate hike, and upbeat euro zone data dimmed
the greenback's safe-haven appeal. []
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.
Ole Hansen, senior manager at Saxo Bank, said investors had
been encouraged by the strength of gold's recovery after it fell
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.
COMMODITIES FIRM
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 $11.10 at $1,193.40.
Other commodity prices also firmed on the back of the
weaker dollar, with base metals up and oil nearly 1.5 percent
higher to above $78 a barrel. [] []
Gold tends to track crude prices, as the metal can be bought
as a hedge against oil-led inflation.
Elsewhere the world's biggest gold miner, Barrick Gold Corp
<ABX.TO>, said on Tuesday it had completed the elimination of
all of its gold hedges as planned. De-hedging has represented a
significant source of demand in recent years. []
In the physical market, the largest gold exchange-traded
fund, the SPDR Gold Trust <GLD>, said its holdings rose 2.134
tonnes to nearly 1,130 tonnes on Monday. []
Indian gold offtake abated on Tuesday as prices resumed
their upward trend, after a modest pick-up in recent sessions
when traders stocked up ahead of wedding demand. []
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 India's central bank had bought
200 tonnes of gold, followed by acquisitions by Russia, Sri
Lanka and Mauritius, sparked a 13 percent price rise that month.
Among other precious metals, spot silver <XAG=> was bid at
$18.75 an ounce against $18.45. Platinum <XPT=> was at $1,470 an
ounce against $1,452, while palladium <XPD=> was at $379 against
$363.50.
(Editing by James Jukwey)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
