* Dollar supported by concerns QE impact already priced in
* Gold investors eye Fed speakers for further clues on QE
* Palladium seen as one of top picks among commods by UBS
(Updates throughout, previous SINGAPORE)
By Jan Harvey
LONDON, Oct 19 (Reuters) - Gold held steady near $1,370 an
ounce in Europe on Tuesday as expectations for further monetary
easing in the United States continued to support prices, though
gains in the dollar put the brakes on the metal's run higher.
Spot gold <XAU=> was bid at $1,369.60 an ounce at 0914 GMT,
against $1,368.45 late in New York on Monday. U.S. gold futures
for December delivery <GCZ0> eased $1.40 an ounce to $1,370.70.
Prices rallied to record highs at $1,387.10 an ounce last
week amid concerns over the stability of the currency markets
and on expectations further U.S. quantitative easing could
undermine the dollar, but corrected as the dollar bounced back.
They have since stabilised, however, as investors look ahead
to a meeting of the Federal Open Market Committee next month.
"Gold is not going to move much lower when you have the FOMC
ahead of us in early November, the G20 preparations later this
month and the full summit next month," said Credit Agricole
analyst Robin Bhar.
"These are all potentially friendly towards the gold market,
certainly the FOMC, where it is expected that they will embark
on further easing," he said. "We will see that perhaps pushing
the dollar lower."
"Obviously we have the currency tensions as well," he added.
"With the yen at 15-year high and the Aussie dollar at highs,
and emerging market currencies appreciating, gold is seen as
something that is a refuge from the currency tensions."
The dollar managed to extend gains against a basket of
currencies on Tuesday, keeping a lid on gains in gold. The U.S.
unit is backed by some concerns the monetary easing expected
from the Fed next month is already largely priced in. []
The currency markets are now awaiting comments from a host
of speakers from the Fed later on Tuesday. Fed Chairman Ben
Bernanke is scheduled to give brief remarks before the opening
of the Junior Achievement Finance Park in Virginia at 2000 GMT.
Meanwhile New York Fed President William Dudley, Chicago Fed
chief Charles Evans, Atlanta Fed chief Dennis Lockhart,
Minneapolis Fed President Narayana Kocherlakota and Dallas Fed
President Richard Fisher are all set to speak later in the day.
GOLD ETF SEES OUTFLOWS
In New York, the world's largest gold exchange-traded fund,
the SPDR Gold Trust <GLD>, reported another small outflow of
just under 1 tonne from its bullion holdings on Monday. Its
holdings have declined for nine of the last 15 sessions.
[]
However a drop in bullion prices ignited purchases from
Indian jewellers as the festive season progressed, while demand
from the electronics sector in Japan failed to offset selling
from investors, dealers said on Tuesday. []
"Overall demand is continuing despite near-record prices,
activity is good on corrections to $1,360, or 19,700 rupees,
with the rupee also helping out," said Pinakin Vyas, assistant
vice-president with bullion importing IndusInd Bank in Mumbai.
Among other precious metals, silver <XAG=> was at $24.33 an
ounce against $24.35, platinum <XPT=> was at $1,694 an ounce
against $1,690, and palladium <XPD=> at $587 against $583.58.
Swiss bank UBS identified palladium on Tuesday as one of its
top picks among commodities going forward. It forecasts an
average price for the autocatalyst metal of $500 an ounce this
year, rising to $625 in 2011 and $700 in 2012. []
The metal has been one of the best-performing precious
metals this year, rising 44 percent.
"Constrained South African production capacity, Russian
inventories almost exhausted, global demand steadily
rising/recovering -- all contribute to a very tight market," UBS
said in a note.
(Editing by James Jukwey)
