* Gold turns lower on technical selling
* Weaker dollar, euro zone concerns underpin gold
* Gold-to-silver ratio rises toward 50
* CFTC data shows spec longs declined
* Coming Up: US Nov. S&P Case-Shiller index on Tuesday
(Recasts, adds comments, updates prices, new byline,
changes dateline, previously LONDON)
By Frank Tang
NEW YORK, Jan 24 (Reuters) - Gold turned weaker on
technical selling on Monday, after the metal initially rose as
a lower dollar and lingering worries about an European debt
crisis helped recoup some lost ground from a two-month low last
week.
Gold struggles to break above strong technical headwinds,
after analysts said a new downward trend was formed when prices
broke below its 100-day average last week and remained under
its 50-day average, a level bullion had held since its breakout
in late August last year.
A dearth of safe-haven demand in recent weeks as concerns
over euro zone sovereign debt and the U.S. economic outlook
receded meant gold struggled to make fresh headway after
hitting a record $1,430.95 an ounce in December.
"We have got a pretty robust macro backdrop despite some
potential for European sovereign issues," said RBS analyst
Daniel Major.
"The safe-haven argument, which was the dominant theme last
year, is unlikely to be repeated this year," he said.
Spot gold <XAU=> fell 0.5 percent to $1,335.85 an ounce at
3:10 p.m. EST (2010 GMT). U.S. gold futures for February
delivery <GCG1> settled up $3.50 an ounce at $1,344.50.
The precious metal fell about 1.5 percent last week to a
two-month low, and that called into question the metal's
lengthy bull run as a spate of encouraging economic data
including U.S. job data and German business sentiment boosted
interest in assets seen as higher risk at gold's expense.
Gold's loss was limited on Monday after the dollar slipped
for a fifth straight session against the euro, hitting a
two-month low as expectations of higher euro zone interest
rates sparked traders to push the single currency above
important technical levels. []
Analysts said bullion still benefited from concern over the
stability of the euro zone, which was highlighted by political
uncertainty in Ireland, after the country's junior coalition
party withdrew from Prime Minister Brian Cowen's government.
[]
Silver <XAG=> fell 1.9 percent to $26.94 an ounce. Holdings
of the world's largest silver ETF, the iShares Silver Trust
<SLV>, fell by 181 tonnes on Friday, their biggest one-day
outflow since late November.
The gold-to-silver ratio -- the number of ounces of silver
needed to buy an ounce of gold -- rose back towards 50, its
highest level since late November, as some traders believed
gold is becoming increasingly expensive relative to silver.
Monday's turnover was mixed as U.S. COMEX gold was 25
percent above its 30-day average, but silver futures volumes
were 35 percent below their average.
Gold exchange-traded funds saw outflows as investors cashed
in some of last year's gains. While that trend reversed late
last week as prices fell, analysts said the sustainability of
this buying is questionable.
Holdings of the largest gold-backed ETF, the SPDR Gold
Trust <GLD>, rose by more than 20 tonnes on Friday. However,
they are still down some 9 tonnes this year. []
SPECS LONGS FALLING
Trade data by the Commodity Futures Trading Commission
(CFTC) showed investment interest in the U.S. futures market
has waned of late.
The latest CFTC's Commitments of Traders report showed a
third successive drop in the net speculative long or bullish
position in gold, bringing the net noncommercial long to its
lowest since the week of July 26, 2009.
The CFTC data also showed the silver speculative position
rose last week by about 1.3 percent, partially offsetting the
previous week's fall, while the platinum net noncommercial position staged its largest weekly rise in at least four
years.
Platinum <XPT=> slipped 0.7 percent to $1,811 an ounce,
while palladium <XPD=> dropped 1.4 percent to $808.72.
Prices at 3:11 p.m. EST (2011 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCG1> 1344.50 3.50 0.3% -5.4%
US silver <SIH1> 27.321 -0.106 0.0% -11.7%
US platinum <PLJ1> 1814.60 -4.20 -0.2% 2.0%
US palladium <PAH1> 816.55 -0.20 0.0% 1.6%
Gold <XAU=> 1334.30 -7.95 -0.6% -6.0%
Silver <XAG=> 26.88 -0.59 -2.1% -12.9%
Platinum <XPT=> 1809.49 -14.51 -0.8% 2.4%
Palladium <XPD=> 808.72 -11.03 -1.3% 1.2%
Gold Fix <XAUFIX=> 1343.00 -4.50 -0.3% -4.8%
Silver Fix <XAGFIX=> 27.56 42.00 1.5% -10.0%
Platinum Fix <XPTFIX=> 1822.00 2.00 0.1% 5.3%
Palladium Fix <XPDFIX=> 816.00 2.00 0.2% 3.2%
(Additional reporting by Jan Harvey and Amanda Cooper in
London; Editing by Sue Thomas and Marguerita Choy)
