* Gold may retrace to $1,320-technicals
* Coming Up: U.S. Chicago PMI Jan; 1445 GMT
(Updates prices, adds premiums for gold bars)
By Lewa Pardomuan
SINGAPORE, Jan 31 (Reuters) - Gold edged down in choppy
trade on Monday, after posting its biggest gains in eight weeks
in the previous session on the political unrest in Egypt, but
buying interest in the physical market offered support and
offset worries about declines in ETF holdings.
Silver was at a 1-week high, tracking gold's earlier gains.
The world's largest gold-backed exchange-traded fund, SPDR Gold
Trust , said its holdings slipped to 1,224.118 tonnes by
Jan. 28, its lowest since May of last year.
Spot gold fell $1.05 to $1,337.25 an ounce by 0724
GMT, having earlier risen to around $1,345. Gold dropped to as
low as $1,308 on Friday, its weakest since early October 2010,
before reversing losses on safe haven buying related to the
chaos in Egypt.
"We need to see the holdings in ETF start to increase before
gold prices can head up and make a new high. Bullion holdings at
ETFs are a reflection of longer-term demand for gold," said Ong
Yi Ling, investment analyst at Phillip Futures in Singapore.
"Recently, the holdings of gold ETFs have decreased due to
optimism in the U.S. economic recovery. If concerns over jobs
and unemployment come back to haunt us, then we could see the
ETF holding start to increase again
U.S. gold futures for February fell $3.4 an ounce to
$1,337.30 an ounce, having ended up nearly 2 percent on Friday.
Brent oil futures climbed near $100 a barrel and Asian
stocks fell on Monday, hurt by fears that the deadly protests in
Egypt may foment unrest throughout the Middle East and choke oil
supplies, accelerating a move out of riskier assets. MKTS/GLOB]
Egyptian protesters were camped out in central Cairo on
Monday and vowed to stay until they had toppled President Hosni
Mubarak, whose fate appeared to hang on the military as pressure
mounted from the street and abroad.
In the physical sector, premiums for gold bars were at their
strongest level since at least 2004 on tight supply, short
covering before the festive season in India and China as well as
physical buying driven by the deadly protests in Egypt.
Spot gold is expected to temporarily end the rebound around
$1,348 and retrace to $1,320 as the sharp surge on Friday is
regarded as part of a wave (4) correction, according to Wang
Tao, a Reuters market analyst for commodities and energy
technicals.
"I think the problem in Egypt could be resolved soon. If the
U.S. is doing something, it will be solved. You can't have so
much violence in so many days. But I think people will still
want to buy gold on dips," said a dealer in Hong Kong.
U.S. President Barack Obama on Sunday urged an "orderly
transition" to democracy in Egypt, stopping short of calling on
President Hosni Mubarak to step down but signaling that his days
may be numbered.
Precious metals prices 0724 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1337.25 -1.05 -0.08 -5.79
Spot Silver 27.98 0.07 +0.25 -9.33
Spot Platinum 1791.49 -1.01 -0.06 1.36
Spot Palladium 812.30 -1.20 -0.15 1.60
TOCOM Gold 3537.00 33.00 +0.94 -5.15 63924
TOCOM Platinum 4765.00 7.00 +0.15 1.47 11845
TOCOM Silver 73.60 2.80 +3.95 -9.14 1972
TOCOM Palladium 2138.00 14.00 +0.66 1.96 395
Euro/Dollar 1.3605
Dollar/Yen 82.05
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Himani Sarkar)
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