(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, April 25 (Reuters) - Gold rose on Friday on
bargain hunting after it dropped to a three-week low, but gains
may be limited with a firming dollar robbing the metal of some
of its appeal as an alternative investment.
Gold has lost about 14 percent in value since spiking to a
record high of $1,030.80 an ounce on March 17. Attempts to
revisit the lifetime high have been met by profit taking,
prompting investors to liquidate some of their holdings.
Gold <XAU=> rose to $888.80/889.80 an ounce from
$885.25/886.45 an ounce late in New York on Thursday, when it
dropped as low as $883.05, its lowest since early April, after
the dollar jumped against other currencies.
"You can say there's a little bit of short-covering. But I
think people still hesitate to push it too high because the oil
price is going down," said Ronald Leung, director of Lee Cheong
Gold Dealers in Hong Kong.
"Resistance is of course at $900. You can say the downside
is at $875 and then $850."
In other precious metals, platinum fell more than 1 percent
to its lowest level in three weeks, silver held near a
three-week low while palladium matched a three-week trough hit
on Thursday.
Buying from jewellers and speculators in China and Hong
Kong helped offset early selling in Japan, but gold's gains
could be capped around $897 as charts had turned bearish, said
Louis Lok, a dealer at Bank of China in Hong Kong.
"Gold needs to hold around the $880 level. If it is broken,
we can see $865," said Lok.
Oil <CLc1> dipped below $116 a barrel as a firmer dollar
sparked a sell-off and investors shifted cash to equities, but
concerns over supply disruptions limited losses.
The dollar steadied against the euro and the yen, holding
firm after data showed signs of resilience in the U.S. labour
market. []
"Nowadays people seem to switch from gold to agriculture
products. There doesn't seem to be enough food," said Leung of
Lee Cheong Gold Dealers, referring to speculative buying that
has driven rice to record highs.
"I think the funds have too much cash on hand," he said.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange added $1.0 an ounce to
$890.4 an ounce.
Spot platinum <XPT=> fell to $1,937.50/1,947.50 an ounce
from $1,961.50/1,971.50 late in New York, well below a record
high of $2,290 hit on March 4.
The new benchmark contract in Tokyo platinum futures
<0#JPL:>, April 2009, ended the morning session at 6,335 yen
per gram after opening at 6,370 yen.
Precious metals consultancy GFMS Ltd said platinum may
spike to a record high of $2,400 an ounce this year as the
investment climate continues to be positive and fundamentals
remain strong. []
Silver <XAG=> edged up to $16.69/16.76 an ounce from
$16.68/16.78 an ounce. Spot palladium <XPD=> fell to $434/439
an ounce from $435/441 an ounce.
Precious metals prices at 0328 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 889.30 3.50 +0.40 6.80
Spot Silver 16.72 -0.01 -0.06 13.20
Spot Platinum 1940.00 -15.00 -0.77 27.63
Spot Palladium 434.00 -0.50 -0.12 17.93
Euro/Dollar 1.5702
Dollar/Yen 104.07
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
