* Gold near 11-week high, but dealers expect profit taking
* Oil rises for third day on Middle East conflict
* Dollar slips against euro
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Dec 30 (Reuters) - Gold steadied above $870 on
Tuesday, hovering within sight of a 11-week high hit the
previous day, with sentiment underpinned by conflict in the
Middle East, firm oil prices and a weaker U.S. dollar.
Gold rallied as much as 24 percent in 2008, striking a
record high of $1,030.80 in March on fears of rising energy
costs and as investors diversified into precious metals on the
dollar's uncertain outlook.
"There's a reasonable chance we'll see some end-year profit
taking in what has been the best performing commodity this year
and certainly this quarter," said Mark Pervan, head of
Australia & New Zealand Bank research.
"There's been concerns of high political risk in the
market. But I think it might struggle to get through $900
unless there's a major flare up again tonight," he said,
referring to the fighting between Israel and Hamas in Gaza.
Gold <XAU=> was trading at $877.70 an ounce, up $0.20 an
ounce from New York's notional close on Monday, when it rallied
to as high as $889.55 an ounce after oil jumped more than $2 on
fears Israeli attacks on Hamas could disrupt oil supplies.
Buying from Japanese investors amid fears of a global
recession helped gold stay at current levels, dealers said.
Gold last traded above $900 in early October, before tumbling
to its weakest in 13 months around $680 after sell-off in
equities and fears of a deepening global economic downturn
forced investors to cash in to cover losses.
It slowly regained its safe-haven appeal after stock
markets stabilised, with a rebound to around $800 also igniting
technical buying.
Israeli warplanes killed 10 Palestinians in attacks that
targeted Hamas government buildings and other symbols of the
Islamist group on the fourth day of the fiercest air offensive
in Gaza in four decades. []
Oil <CLc1> rose for a third day on Tuesday on tensions in
the Middle East but prices were still on track to end the year
down 60 percent, the biggest annual loss on record. []
"Although gold has the energy to head higher,
sustainability would be a key factor," said Pradeep Unni at
Richcom Global Services in Dubai, adding that gold had in the
past failed to hold on to gains driven by geopolitical
tensions.
He pegged resistance around $930 an ounce, a near
three-month high hit in early October.
The euro rose to $1.4062 <EUR=> as tensions in the Middle
East weighed on the U.S. currency. []
Investors are awaiting the release of U.S. consumer
confidence for December, due at 1500 GMT. Economists polled by
Reuters expect a reading of 45.0 compared with 44.9 in
November.
Platinum <XPT=> was trading at $908.50 an ounce, down $7.00
from New York notional close.
New York gold futures <GCZ9> added $3.2 an ounce to $878.5
in electronic trade.
Precious metals prices at 0245 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 877.70 0.20 +0.02 5.40
Spot Silver 10.87 0.02 +0.18 -26.40
Spot Platinum 908.50 -7.00 -0.76 -40.23
Spot Palladium 182.00 -3.50 -1.89 -50.54
TOCOM Gold 2573.00 -7.00 -0.27 -15.92
15541
TOCOM Platinum 2652.00 -7.00 -0.26 -50.33
4585
TOCOM Silver 319.30 6.00 +1.92 -40.98
325
TOCOM Palladium 550.00 16.00 +3.00 -59.29
254
Euro/Dollar 1.4095
Dollar/Yen 90.31
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Kazunori Takada)
