* Euro climbs amid speculation of rescue plan for Greece
* Gold prices consolidate in $1,050/1,075/oz range
* CIC says it has $155.6 mln invested in SPDR gold ETF
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Feb 9 (Reuters) - Gold rose above $1,070 an ounce on
Tuesday as the dollar fell versus the euro amid speculation a
rescue plan for struggling Greece may be arranged soon,
enhancing the precious metal's appeal as an alternative asset.
Spot gold <XAU=> hit a session high of $1,079.05 an ounce
and was bid at $1,073.20 an ounce at 1424 GMT, against $1,062.80
late in New York on Monday. Late last week it fell to a
three-month low at $1,043.75 as the euro tumbled.
"The market is looking for upside potential on euro-dollar
given the record short positions in the euro," said Saxo Bank
senior manager Ole Hansen. "Gold... is in a much stronger
position after the wash out on Friday."
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange rose $7.30 to
$1,073.00 an ounce.
The euro extended gains versus the dollar on Tuesday as
investors covered short positions on market speculation that
some form of bailout will soon be organised for Greece. []
News that European Central Bank President Jean-Claude
Trichet was leaving a meeting of central bankers in Sydney early
to attend a European Council meeting on Feb. 11 prompted
speculation a plan was being discussed. []
If these issues are successfully addressed, it is likely to
provide a fillip to the euro, and consequently to gold.
"The issue of sovereign risk, which is currently working in
the dollar's favour and against the euro and therefore gold,
could come back to haunt the dollar," HSBC said in a note.
"If the European Union member nations begin to address their
fiscal problems and the U.S. fails to make progress on similar
fiscal issues...the dollar may find itself on the defensive
later in the year. This could help boost gold," it said.
ETF HOLDINGS STEADY
A Reuters poll on Tuesday found only a one in four chance
that Greece may have to seek a bailout this year to put its
public finances back on track. []
China Investment Corp [], the Asian giant's $300
billion sovereign wealth fund, said it had invested $155.6
million in the world's largest gold-backed exchange-traded fund,
New York's SPDR Gold Trust <GLD>. []
The trust's holdings were unchanged on Monday after
reporting their first inflow of 2010 after spot prices fell
sharply on Friday.
Gold ETFs issue securities backed by physical stocks of
bullion, giving the investor exposure to the underlying gold
price without taking delivery of the commodity itself.
Among other precious metals, silver <XAG=> was at $15.20 an
ounce against $14.98, tracking gold higher. Platinum <XPT=> was
at $1,490 an ounce against $1,472, while palladium <XPD=> was at
$409 against $404.
"Both metals have tracked gold and the dollar overnight and
will be looking to the currencies and broad risk sentiment for
direction," said James Moore, an analyst at TheBullionDesk.com.
The world's number one carmaker Toyota Motor Corp <7203.T>
said it is recalling nearly half a million of its flagship Prius
and other hybrid cars for braking problems. []
BMW <BMWG.DE>, the world's biggest premium automaker, said
on Tuesday its group vehicle sales rose 16.6 percent in January
to 82,120 units, and reiterated its target to boost 2010 unit
sales at a single-digit rate. []
Platinum and palladium are highly exposed to the automotive
sector, as more than half of demand for the metals each year
come from carmakers who use the metals in auto-catalysts.
(Editing by Keiron Henderson)
