* Equities tagged for higher open in United States
* Scrap inflow at higher prices limit gains
* SPDR gold ETF, Julius Baer gold ETF hit record levels
(Updates prices)
By Paul Lauener
LONDON, March 17 (Reuters) - Gold weakened on Tuesday as
expectations of a higher opening among Wall Street stocks
reduced the metal's appeal as a haven, while the steady supply
of scrap gold entering the market also kept a lid on gains.
However, fresh flows into exchange-traded funds showed
investors' appetite for bullion remained sharp and prevented
further falls.
Spot gold <XAU=> eased to $915.15/916.35 an ounce at 1230
GMT from $922.55 late in New York on Monday.
"A lot of upward pressure to the market was driven by risk
aversion," said BNP Paribas analyst Michael Widmer.
"There has been a bit of a rebound in the equity markets,
and financial stocks are performing a bit better in the United
States," he said. "That has taken some upward pressure off
prices."
U.S. stock futures were pointing to a bounce at the open,
with sentiment underpinned by hopes that banks may be seeing
some stabilisation. Equities climbed to a one-month high in Asia
as banks rose, although they have eased in Europe. []
Prices are being pressured by a flood of scrap jewellery
returning to the market, as economic weakness, near-record
bullion prices and currency devaluation in key jewellery markets
prompt selling.
"Traders report an increasing supply of scrap gold in India,
the world's largest gold consumer," Commerzbank said in a note.
The market is looking ahead to a two-day U.S. Federal
Reserve meeting due to begin later on Tuesday. The Fed is
expected to save its ammunition amid tentative signs of
stability returning to the financial sector. []
Fears over economic and financial instability have boosted
inflows into gold and bullion-backed exchange-traded funds since
the beginning of the year. Latest data suggests that trend is
picking up again after running out of steam last week.
RECORD
New York's SPDR Gold Trust <GLD> said its holdings hit a
record 1,069.05 tonnes on Monday, while in Europe, holdings of
Julius Baer's <BAER.VX> gold-backed ETF rose 20 percent in the
week to March 17, also to a record. [] []
"The (SPDR) fund is buying gold at the expense of the
jewellery market, which is seeing reduced buying activity," said
Fairfax analyst John Meyer.
Gold demand in the world's biggest jewellery market, India,
remained week, as traders anticipated lower prices, dealers
said. "Local demand is very bad," one trader told Reuters.
[]
The decline in jewellery buying, which typically accounts
for two-thirds of global demand, is also tempering gold prices,
analysts said.
Among other precious metals, spot silver <XAG=> was little
changed at $12.84/12.90 an ounce from $12.89.
Platinum <XPT=> edged down to $1,047/1,052 an ounce from
$1,055, while palladium <XPD=> slipped to $197.50/201.50 an
ounce from $201.
Both metals are, unlike gold, primarily industrial in use
and have suffered from a slowdown in economic activity.
(Additional reporting by Jan Harvey; editing by Anthony Barker)
