* Gold extends losses on firm dollar, stocks
* India's January gold imports dive over 90 pct on year
* U.S. Federal Reserve keeps interest rates near zero
* Nikkei up 1.8 pct, oil slides to below $42 a barrel
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Jan 29 (Reuters) - Gold extended losses to trade
below $900 an ounce on Thursday, after registering its biggest
daily percentage drop in more than two weeks the previous day,
as stock markets rallied and the U.S. Fed calmed inflation
fears.
Bullion was below a three-month high of $915.30 hit on Jan.
26. It has bounced around 10 percent since falling to a
one-month low around $801 hit two weeks ago as investors sought
safe-haven assets amid turmoil in the financial markets.
Gold <XAU=> was trading at $881.60 an ounce, down $4.00
from New York's notional close on Wednesday, when it hit an
intraday high of $902.90 before falling as low as $879.10.
"There's disappointed selling because gold couldn't go much
higher after rising to $915. There's a bit of selling in the
Asian region," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
Gold's Monday rally to a three-month high had also spurred
selling in the physical market, with dealers reporting an
increase in the supply of scrap in Southeast Asia as well as
India, which is the world's main gold consumer.
India's gold imports plunged more than 90 percent to just
1.2 tonnes in January 2009, from 18tonnes at the same month
last year, due to high prices and amplestocks, the Bombay
Bullion Association said. []
"I think that's probably the fact that's weighing on the
gold price at the moment," said David Moore, commodities
strategist at Commonwealth Bank of Australia in Sydney.
"I would have thought you might have seen gold a little bit
better supported still by investor interest," said Moore, who
expects gold to trade at $875 by the end of March and $890 by
end-June.
The dollar firmed against the yen after the Fed kept
interest rates near zero and said it was prepared to buy
long-term Treasury debt if that would help improve credit
conditions. The euro slipped to $1.3117. []
Japan's Nikkei average climbed 1.8 percent, boosted by
exporters such as Honda Motor <7267.T> on a softer yen, while
financial shares jumped amid optimism about the U.S.
government's rescue plan for banks. []
U.S. President Barack Obama's economic stimulus plan,
possible creation of a government "bad bank" to absorb toxic
assets and Fed readiness to buy long-term bonds all gave hope
of forceful U.S. action soon to help ease the global financial
crisis. []
"I will have to say that when we approach the $900s, the
physical players are coming in to sell," said a dealer in
Singapore. "But the recent decline still looks OK. The
longer-term uptrend is still intact."
"The $880 region should provide good support, and the next
support will probably come in around $860.So basically, this
current correction is not alarming, I guess, as long as we hold
above $860," said the dealer, referring to two highs seen this
month.
Oil <CLc1> slipped to above $41 a barrel. []
Platinum <XPT=> was trading at $943.00 an ounce, down
$10.50 or 1.1 percent from New York's notional close.
New York gold futures <GCZ9> fell $6.5 an ounce to $881.8
in electronic trade.
Precious metals prices at 0704 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 881.60 -4.00 -0.45 5.87
Spot Silver 11.87 -0.08 -0.67 -19.63
Spot Platinum 943.00 -10.50 -1.10 -37.96
Spot Palladium 186.50 -1.50 -0.80 -49.32
TOCOM Gold 2558.00 -25.00 -0.97 -16.41
34075
TOCOM Platinum 2733.00 -7.00 -0.26 -48.81
7166
TOCOM Silver 341.30 0.20 +0.06 -36.91
665
TOCOM Palladium 544.00 -4.00 -0.73 -59.73
142
Euro/Dollar 1.3068
Dollar/Yen 89.94
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
