(Updates prices)
By Lewa Pardomuan
SINGAPORE, April 16 (Reuters) - Gold dropped on Wednesday
as buying interest subsided after an oil-driven rally the
previous day, and dealers expect volatility to persist with a
firming U.S. dollar weighing on sentiment.
Gold powered to a record high of $1,030.80 an ounce on
March 17 but tumbled to a two-month low of $872.90 in early
April in the down draft of a broad commodities sell-off.
It has firmed since then, but is struggling to retest a key
resistance of $950.
Gold <XAU=> was trading on Wednesday in Asia at
$925.60/926.40, below late New York levels of $927.60/928.40.
It was backing away from an intraday high of $936.50 on
Tuesday when oil hit a record high above $114 a barrel and
lifted gold's appeal as a hedge against inflation.
Gold has risen more than 20 percent in 2008 on speculative
buying ignited by rising oil prices and expectations of further
interest rate cuts in the United States, which reduce the
dollar's appeal.
"You couldn't rule out the possibility of a return to the
$800s. With gold and with other metals, you should never say
never," said David Moore, an analyst at Commonwealth Bank of
Australia in Sydney.
"If the Fed does cut rates further, that would be, I think,
a supportive factor for the gold price," he said.
For now, the dollar is finding support, which raises the
price of gold for buyers using currencies other than the
dollar.
The euro fell to $1.5782 <EUR=>, moving away from a record
high of $1.5915 hit on Thursday, after surprisingly robust U.S.
inflation and manufacturing data suggested the Federal Reserve
may be less aggressive in cutting interest rates.[]
Oil <CLc1> hovered around $113 a barrel on Wednesday, ahead
of U.S.government data that may show another decline in
gasoline anddistillate inventories.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange fell $3.2 an ounce to
$928.8.
"When all players are already long, there's no-one left to
buy gold unless the price is coming down," said a dealer in
Singapore.
"However, any pullback might be quickly recovered. I expect
a volatile range of between $905 and $940 an ounce."
In other precious metals, silver fell below New York
levels, platinum hovered below $2,000, while sister metal
palladium bounced.
Spot platinum <XPT=> fell to $1,957/1,967 an ounce from
$1,970/1,980 late in New York on Tuesday -- well below a record
high of $2,290 hit on March 4.
The most active Tokyo platinum futures <0#JPL:> ended the
morning session 50 yen per gram lower at 6,270 yen.
Silver <XAG=> edged down to $17.75/17.80 an ounce from
$17.79/17.84 an ounce. Spot palladium <XPD=> rose to $449/454
an ounce from $447/452 an ounce.
Precious metals prices at 0203 GMT
Metal Last Change Pct chg pct chg Turnover
(YTD)
Spot Gold 925.80 -2.20 -0.24 11.18
Spot Silver 17.75 -0.09 -0.50 20.18
Spot Platinum 1957.00 -13.00 -0.66 28.75
Spot Palladium 449.00 2.00 +0.45 22.01
TOCOM Gold 3050.00 1.00 +0.03 -0.33
13097
TOCOM Platinum 6270.00 -50.00 -0.79 17.44
11534
TOCOM Silver 586.10 2.00 +0.34 8.34
202
TOCOM Palladium 1502.00 -32.00 -2.09 11.18
660
Euro/Dollar 1.5797
Dollar/Yen 101.74
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Neil Fullick)
