* Gold retreats but well bid below $1,270/oz
* Soros: gold "ultimate bubble", won't last
* GLD posts biggest one-day holdings rise since June
* Coming up: U.S. producer prices on Thursday
(Recasts, updates prices to market close, adds comments,
changes byline/dateline, previous LONDON)
By Frank Tang
NEW YORK, Sept 15 (Reuters) - Gold retreated on Wednesday
but largely held onto the last session's gains to all-time
highs, as investor jitters and volatility in other markets
prompted buying of the metal as an alternative investment.
Bullion found support just below $1,270 an ounce, near its
record peak of $1,274.75 set on Tuesday, as the dollar surged 3
percent against the yen after Japan intervened to weaken its
currency for the first time in six years. (Chart:
http://link.reuters.com/hyp53p)
"What's driving gold up is the fact that gold is a
currency, it no longer is just a precious metal. The notion
that gold is a reserve asset is a fundamental reason for it to
rally," said Dennis Gartman, a Virginia-based hedge fund
manager and publisher of the Gartman Letter.
Buying sentiment in the metal was weighed down by comments
from billionaire financier George Soros, who reiterated to
Reuters Insider that gold was "the ultimate bubble".
"It's certainly not safe and it's not going to last
forever," Soros said. []. (Insider video of Soros
interview on gold: http://link.reuters.com/mav73p )
Soros is one of the many high-profile hedge fund managers
who in recent years turned bullish on gold. He was also a major
stakeholder in the SPDR Gold Trust <GLD>, the world's largest
exchange-traded fund backed by gold.
Gartman said investors always heeded trading advice from
Soros but gold's rally had yet to finish.
"Bull markets tend to end after they have gone
parabolically higher, and gold has not done it yet," Gartman
said.
Spot gold <XAU=> was at $1,267.50 an ounce by 3:24 p.m. EDT
(1924 GMT), down $3 versus the close on Tuesday, when it surged
more than 2 percent in its biggest one-day rally in four
months.
U.S. gold futures for December delivery <GCZ0> settled down
$3 at $1,268.70.
Gold hovered near its all-time high on Wednesday, the
second anniversary of the collapse of Lehman Brothers, a
debacle that sparked the worst economic crisis since the Great
Depression and underpinned investor demand for the metal.
Economic data showed U.S. industrial output slowed but
still rose 0.2 percent last month -- normally a negative for
gold, which has gained some 70 percent since the credit crunch
of 2008 and Lehman's demise.
Also supportive for gold is the increasing likelihood of
the Federal Reserve renewing its efforts to keep monetary
policy exceptionally loose through the purchase of government
bonds, a move known as quantitative easing.
On charts, gold was well supported by a long-term rising
channel, and technical momentum could propel prices above
record highs, analysts said.
UP, UP, UP
Gold in yen terms <XAUJPY=R> rose to a high of 108,849 yen
an ounce, gaining 3 percent on the day and hitting its highest
since early July, echoing a sharp fall in the yen after
export-dominant Japan intervened to weaken its currency.
The metal largely ignored Anglogold Ashanti's <ANGJ.J>
long-expected move to close its money-losing hedgebook -- the
last remaining hedges owned by a major gold producer.
The South African miner's hedgebook at 2.72 million ounces
represented about 7 percent of the 42 million ounces of gold
bullion held by SPDR Gold Trust, commonly called GLD because of
its ticker symbol. []
GLD reported its largest one-day rise in gold holdings
since late June. It said holdings rose to 1,298.698 tonnes by
Sept. 14 from 1,292.619 tonnes by Sept. 13. []
Gold is on course for a rise of about 16 percent in 2010,
fueled largely by investor nervousness after the fallout from
the euro zone debt crisis and concerns about the global
economy.
Spot silver <XAG=> rose to $20.54 an ounce, from $20.40 the
day before.
Platinum <XPT=> hit $1,611.50 an ounce, the highest since
June 21, and was last at $1,607.50 versus $1,586.30. Palladium
<XPD=> traded at $554.50 from $547.75 on Tuesday.
Prices at 3:29 p.m. EDT (1929 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1268.70 -3.00 -0.2% 15.7%
US silver <SIZ0> 20.542 0.141 0.0% 21.9%
US platinum <PLV0> 1605.30 10.90 0.7% 9.1%
US palladium <PAZ0> 557.15 5.40 1.0% 36.3%
Gold <XAU=> 1267.75 -2.52 -0.2% 15.6%
Silver <XAG=> 20.56 0.16 0.8% 22.1%
Platinum <XPT=> 1607.50 21.20 1.3% 9.7%
Palladium <XPD=> 554.50 6.75 1.2% 36.7%
Gold Fix <XAUFIX=> 1267.00 -3.40 -0.3% 14.8%
Silver Fix <XAGFIX=> 20.44 13.00 0.6% 20.3%
Platinum Fix <XPTFIX=> 1584.50 5.50 0.3% 8.1%
Palladium Fix <XPDFIX=> 546.00 5.00 0.9% 35.8%
(Additional reporting by Amanda Cooper and Michael Taylor in
London; Editing by Dale Hudson)
