* Gold dips in year-end profit taking
* Gold may test $1,000 again on geopolitical tension,
dollar
* Euro gains against dollar
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Dec 31 (Reuters) - Gold softened on Wednesday in
thin year-end trade but a stronger euro could offer support for
the metal, one of few commodities to end the year firmer after
an economic crisis hit demand but gave gold some safe-haven
allure.
Looking ahead, geopolitical tensions and worries about a
deepening global recession could spur more buying from
investors, after a sell-off in equities sent bullion prices
plummeting from a record in March to a 13-month low two months
ago.
Gold <XAU=> was trading at $867.95 an ounce, down $4.15 an
ounce from New York's notional close on Tuesday, having rallied
to a 11-week high at $889.55 on Monday after oil jumped more
than $2 on concerns Israeli attacks on Hamas could disrupt
supplies.
"Buy on the dips if you can and lock in for a run. We've
seen obviously in recent days the effects of geopolitical
uncertainty again in the Middle East," said Darren Heathcote of
Investec Australia in Sydney.
Foreign powers stepped up calls on Israel and Hamas to halt
hostilities after four days of Israeli air attacks on the Gaza
Strip and rocket salvoes by the Islamist militants deep inside
the Jewish state. []
Gold struck a record $1,030.80 in March before slipping on
a combination of profit taking, oil's fall from its all-time
high, a firmer U.S. dollar and recent losses in equities
markets that forced investors to cash in to cover losses.
Gold tumbled to its weakest in more than a year around $680
in October but a rebound to $800 the following month triggered
technical buying, which also spurred purchases from private
investors in Japan and other parts of Asia.
"I think most people should have a chance to go back to
$1,000. If we can stabilise around $800, then I think it will
go all the way up to test the highs again," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
"The market should be a bit bullish in the first quarter of
next year. People still don't have faith in other investment
tools," said Leung, adding that demand from investors helped
offset a lack of buying from jewellers as year-end approached.
Interest in gold-backed exchange-traded funds remains firm.
Holdings of the world's largest bullion-backed ETF, New York's
SPDR Gold Trust <GLD>, rose nearly 5 tonnes to a record 780.23
tonnes on Dec. 29, the trust said. []
Oil slipped to around $39 a barrel on Wednesday, having
fallen $1 in the previous session as fear about demand
outweighed expectations of further Saudi supply cuts in
February and tension in the Middle East due to the
Israeli-Hamas conflict. []
The euro inched up to $1.4115 <EUR=> in thin trade, with
more bleak U.S. economic data on Tuesday adding to expectations
of further action from the Federal Reserve. []
Prices of single-family homes in October plunged a record
18 percent from a year earlier, while consumer confidence fell
to a record low in December. For details, see []
and []
Platinum <XPT=> was trading at $912.50 an ounce, down $2.00
from New York's notional close.
New York gold futures <GCZ9> fell $0.2 an ounce to $869.8
in electronic trade.
Precious metals prices at 0234 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 867.95 -4.15 -0.48 4.23
Spot Silver 10.94 0.03 +0.27 -25.93
Spot Platinum 912.50 -2.00 -0.22 -39.97
Spot Palladium 183.00 0.00 +0.00 -50.27
Euro/Dollar 1.4088
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.
(Editing by Michael Urquhart)
