* 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 slipped in thin year-end
trade on Wednesday but a stronger euro could support the metal,
one of few commodities to end the year firmer after an economic
crisis hit demand but burnished gold's safe-haven allure.
Looking ahead, geopolitical tensions and worries about a
deepening global recession could spur more buying by 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 $865.75 an ounce, down $6.35 an
ounce from New York's notional close on Tuesday, having rallied
to an 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 dropped below $39 a barrel on Wednesday, closing out
its worst year ever after falling 60 percent, with a rapid
reversal in the economic outlook having brought it crashing
back from a mid-year record high.[]
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 $910.00 an ounce, down $4.50
from New York's notional close.
New York gold futures <GCZ9> fell $2.4 an ounce to $867.6
in electronic trade.
Precious metals prices at 0551 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 865.75 -6.35 -0.73 3.97
Spot Silver 10.88 -0.03 -0.27 -26.34
Spot Platinum 910.00 -4.50 -0.49 -40.13
Spot Palladium 183.00 0.00 +0.00 -50.27
Euro/Dollar 1.4078
Dollar/Yen 90.33
(Editing by Clarence Fernandez)
