* Gold eases for a second day; support from Japan
* Gold/silver ratio drops again
* Coming Up: U.S. ICSC chain stores; 1145 GMT
(Updates with comment, refreshes prices)
By Amanda Cooper
LONDON, April 12 (Reuters) - Gold slid by more than 1
percent on Tuesday, echoing a sharp decline in the oil price and
ignoring the decline in the dollar to succumb to profit-taking
after having hit record highs on Monday.
The correlation between gold and the dollar index <.DXY>
reached its most negative in nearly three months, meaning any
decline in the U.S. currency would, in theory at least, help
boost the gold price.
Brent crude oil futures <LCOc1> lost more than $3 a barrel
after top producer Saudi Arabia cut production in response to
weak demand, according to two Saudi-based industry sources.
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This added to pressure on the commodities complex from
Goldman Sachs' decision on Monday to book profits on its
positions in crude oil, copper, platinum and some agricultural
commodities weighed on the raw materials sector, including gold.
Spot gold <XAU=> was last down 1.1 percent at $1,449.66 an
ounce by 1419 GMT, having earlier held at a session high of
$1,467.10. On Monday, gold hit a record at $1,476.21.
U.S. gold futures for June <GCM1> were down 1.1 percent at
$1,415.30 an ounce.
"Commodity prices, not only gold but also the base metals
and the energy space are not profiting from the weaker dollar,"
said Commerzbank analyst Daniel Briesemann.
"Market players are taking the opportunity to take some
profits after the sharp rises of the last few days or weeks," he
said, adding that he believed gold would eventually resume its
current uptrend to challenge $1,500 an ounce.
Adding to potential support for gold was Japan's decision to
raise the severity of its nuclear disaster to the highest level.
[]
"If this was safe-haven buying, you wouldn't see silver so
much stronger than gold. This just shows the spec money is going
into silver," said VTB Capital analyst Andrey Kryuchenkov.
The gold/silver ratio fell to its lowest since at least 1989
on Tuesday, reflecting silver's outperformance relative to gold.
GOLDMAN TAKES PROFITS
Goldman Sachs' decision on Monday to close its long
positions in copper, crude, platinum and some agricultural
commodities initially rattled some of the positive sentiment
towards these more growth-linked assets.
The bank, which is one of the largest players in the
commodity markets, maintained its recommendation to hold long
positions in U.S. December 2011 gold futures <GCZ1>, based on
its view U.S. rates will remain low for an extended period.
Goldman noted "nascent signs of oil demand destruction in
the United States" that could drag prices down, as well as the
possibility of a Libya ceasefire. Nigeria's elections, which
added further risk to oil markets, have thus far not caused
supply disruptions, it added. []
The threat to global inflation from higher energy prices has
been one of the driving forces behind the rise in gold, which
can help investors hedge against higher price pressures.
The International Monetary Fund on Monday said soaring oil
prices and inflation in emerging economies pose new risks to
global recovery but are not yet strong enough to derail it.
[]
Holding of gold in the SPDR Gold Trust <GLD>, the largest
gold exchange-traded fund, were unchanged for a third trading
day on Tuesday, leaving global holdings of metal at 64.322
million ounces, up 1.55 million ounces so far this week and up
2.5 percent so far this month. []
Silver <XAG=> released its earlier gains to trade down 0.3
percent at $40.05 an ounce, and is more than 4 percent below
Monday's 31-year high at $41.93.
Platinum <XPT=> was down 0.7 percent at $1,770.00 an ounce,
while palladium <XPD=> fell 1.8 percent to $767.50.
(Additional reporting by Lewa Pardomuan in Singapore;
editing by William Hardy)
