(Updates prices)
By Lewa Pardomuan
SINGAPORE, April 29 (Reuters) - Gold fell on Tuesday to
track sliding oil, with a weaker euro also prompting investors
to turn their back on the metal ahead this week's Federal
Reserve meeting on interest rates.
Gold often takes cues from movements in the dollar because
of its role as an alternative investment to currencies, stocks
and bonds. The outcome of the Fed meeting would set the tone
for currencies and precious metals, said dealers.
Gold <XAU=> fell to $887.50/888.50 an ounce from
$891.65/892.65 late in New York on Monday, when it hit an
intraday day high of $895.50 an ounce on speculative buying
driven by record high oil.
Trading was thin with Japanese players away for a holiday.
"Everybody is waiting for the Fed," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
"I think gold has to stay above these levels before it can
charge higher again. The range is still the same at between
$880 to $900 for today and tomorrow."
Gold was still trading well below a lifetime high of
$1,030.80 an ounce hit on March 17, with attempts to revisit
the level met by heavy profit taking.
"People started to sell because of a weakening euro. The
physical market is deserted after we saw pretty good demand
from Southeast Asia yesterday," said a dealer in Hong Kong.
"I think falling oil prices also triggered some selling. We
might see support at $880 level," he said.
The euro fell to $1.5546 <EUR=>, while the dollar hardly
changed against the yen 104.13 yen <JPY=> in thin trade as
dealers awaited the outcome of the Fed's two-day policy meeting
which ends on Wednesday.
Speculation is high the U.S. central bank will trim its
funds rate by a 25 basis points to 2.0 percent and signal a
desire to hold rates there for the time being. In theory, lower
rates boost gold's appeal as an alternative investment.
Oil <CLc1> fell towards $118 on Tuesday after hitting a
record the previous day as the Grangemouth refinery in Scotland
reopened from a two-day strike. []
Weaker oil prices reduced gold's appeal as a hedge against
inflation.
"I would expect the market to keep trading in the same
range as it has been in the last few days. People don't want to
take big positions," said a dealer in Hong Kong.
"There has been physical buying in the last two days from
China and other parts of Asia but things look quiet today," he
said.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange fell $6.0 an ounce to
$889.5 an ounce.
Spot platinum <XPT=> fell to $1,955/1,965 an ounce from
$1,964.50/1,974.50 late in New York.
Silver <XAG=> fell to $16.86/16.91 an ounce from
$16.96/17.02 an ounce. Spot palladium <XPD=> dropped to
$430.50/436.50 an ounce from $432.50/438.50 an ounce.
Precious metals prices at 0803 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 886.30 -6.20 -0.69 6.44
Spot Silver 16.84 -0.13 -0.77 14.01
Spot Platinum 1955.00 -10.50 -0.53 28.62
Spot Palladium 430.50 -3.00 -0.69 16.98
TOCOM Gold 3021.00 28.00 +0.94 -1.27
40489
TOCOM Platinum 6450.00 165.00 +2.63 20.81
23433
TOCOM Silver 575.70 14.80 +2.64 6.41
1052
TOCOM Palladium 1510.00 31.00 +2.10 11.77
1618
Euro/Dollar 1.5565
Dollar/Yen 104.17
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by )
