By Lewa Pardomuan
LONDON, May 14 (Reuters) - Gold fell to its lowest in a week
in Europe on Wednesday as the U.S. dollar held gains against
other currencies, but jewellers and other physical buyers
resurfaced in Asia and the Middle East.
Spot gold <XAU=> hit a low of $859.30 an ounce, its lowest
level since May 5, before bouncing to $862.85/863.85 an ounce,
still down from $866.55/867.95 late in New York on Tuesday.
In other precious metals, platinum briefly dipped below
$2,000 an ounce before rebounding on bargain hunting.
"The physical activity is quite good. It's not as good as it
was a couple of weeks ago, but it's still reasonable," said
Frederic Panizzutti, metals analyst at MKS Finance, referring to
physical demand in Asia and the Middle East.
= "We see, generally speaking, only little buying interest
from Europe for either physical or non-physical. We expect the
market to get back to gold and push it higher but you need to
consolidate somewhere between $850 and $950."
Gold has lost more than 16 percent in value since spiking to
a lifetime high of $1,030.80 an ounce on March 17, mostly driven
by profit-taking and the dollar's recovery.
The dollar firmed on Wednesday, building on gains made after
robust U.S. retail data, with attention turning to inflation
figures that could heighten chances of a pause in the Federal
Reserve's rate cut campaign.[]
In the physical market in Asia, dealers noted buying from
Indonesia and Vietnam but demand from India, the world's largest
consumer, slowed down after the end of the busy festival season.
Premiums for gold bars were steady at 80 U.S. cents an ounce
against the spot London prices in Singapore <GOLD/ASIA1>.
The most active June gold futures contract <GCM8> on the
COMEX division of the New York Mercantile Exchange fell $5.7 to
$863.9 an ounce.
Investors are awaiting the U.S. consumer price index for
April due at 1230 GMT for further clues on whether the Fed will
pause in cutting interest rates at its next policy meeting in
June. []
"We still favour further downside in gold, silver and
palladium as a combination of dollar strength, and profit-taking
should weigh on these metals," UBS Investment Bank said in a
client note.
"If platinum is dragged along for the ride, we will look to
buy this metal first and hold our recommendation to add to long
positions in platinum scale down below $1,900 an ounce."
Spot platinum <XPT=> hit an intraday low of $1,997 an ounce,
but then rebounded to $2,024.50/2,044.50 an ounce. It was still
down from $2,037.50 late in New York and well below a record
high of $2,290 an ounce hit on March 4.
Palladium <XPD=> was $430/438 an ounce, barely changed from
$430.50/438.50 in late New York, having earlier hit a low of
$422 an ounce. Silver <XAG=> edged up to $16.71/16.76 an ounce
from $16.66/16.72 in New York.
(Editing by Editing by Peter Blackburn)
