* IMF sold 5.6 tonnes of gold in February; seen bullish
* Gold pressured by euro drop amid uncertainty on Greece
* Euro-priced gold hits record high at 868.57 euros/oz
* Coming up: Fed monetary policy meeting starts Tuesday
(Recasts, adds comments, closing prices, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 26 (Reuters) - Gold prices dropped on Monday as
the euro fell on uncertainties about an aid deal for debt-stricken Greece,
but news of limited gold sales by the International Monetary Fund provided
underlying support.
The IMF sold 5.6 tonnes of gold in February under the second phase of
its gold sales program, the World Gold Council said on Monday.
Traders said that the news confirmed a market view that official-sector
gold sales would be limited due to renewed interest among central banks in
the wake of currency volatility and better price performance of the metal.
"It shows that the lack of central-bank selling is bullish," said James
Steel, chief commodity analyst at HSBC.
Steel said that the market was expecting official gold sales to be
minimal as the IMF's sales are taking place under the umbrella of the third
Central Bank Gold Agreement, which began in Sept. 2009. []
The IMF began its planned sales of 403.3 tonnes of gold last year.
After the sales reported by the WGC, plus those of 200 tonnes to India and
smaller amounts to Sri Lanka and Mauritius last year, it has a further
185.7 tonnes of gold to sell.
Spot gold <XAU=> hit a high of $1,159.73 an ounce in earlier trade, its
highest since April 15, and was at $1,152.75 an ounce at 2:12 p.m. EDT
(1812 GMT) versus $1,155.90 late in New York on Friday.
U.S. gold futures for June delivery <GCM0> on the COMEX division of the
NYMEX settled up 30 cents at $1,154 an ounce.
The combination of risk-averse buying and euro weakness took
euro-priced gold <XAUEUR=R> to a record 868.57 euros an ounce.
Gold was pressured by a weaker euro as confusion about the timing and
amount of emergency aid aid for Greece prompted investors to sell the
single currency. [] []
While euro weakness would usually weigh heavily on gold, other factors
such as worries about long-term viability of paper currencies are
supporting bullion, analysts said.
"If you look at the past few months and how gold often traded, it held
up very well in an environment of a declining euro and a strengthening
dollar," said Michael Widmer, an analyst at Bank of America-Merrill Lynch.
Concerns over the outlook for smaller euro zone economies like Greece
have pressured euro 7 percent lower versus the dollar this year, but gold
is up 5 percent in the same period as sovereign risk fears have lifted
interest in bullion as a haven.
FED EYED
Markets are now awaiting the outcome of a two-day meeting of the U.S.
Federal Reserve starting on Tuesday. The Fed is expected to keep interest
rates unchanged near zero and repeat its pledge to keep them low for an
extended period.
Figures from the U.S. Commodity Futures Trading Commission showed net
long positions in New York gold futures fell slightly last week, but
analysts say the drop was slight given the strength of the rise in
positioning earlier this month.
"While the metal has taken a step back from nearing the all time
positioning high, there is just 4.4 million ounces of a gap to the Oct.
2009 record," said UBS analyst Edel Tully in a note.
"Considering how fast and furious buyers rushed into the market in the
first half of April and alongside the volatile price action in the week to
April 20, it is somewhat comforting that the net long exodus was contained
at 0.8 million ounces."
Silver <XAG=> was at $18.30 an ounce against $18.27, platinum <XPT=> at
$1,739 an ounce against $1,740, and palladium <XPD=> at $562 against
$562.50.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1154.00 0.3 0.0 1096.20 5.3
US silver <SIK0> 18.337 0.145 0.8 16.845 8.9
US platinum <PLN0> 1745.00 3.30 0.2 1471.00 18.6
US palladium <PAM0> 566.40 3.20 0.6 408.85 38.5
Prices at 1:51 p.m. EDT (1751 GMT)
Gold <XAU=> 1153.05 -2.85 -0.2 1096.35 5.2
Silver <XAG=> 18.29 0.02 0.1 16.84 8.6
Platinum <XPT=> 1741.50 1.50 0.1 1465.50 18.8
Palladium <XPD=> 561.50 -1.000 -0.2 405.50 38.5
Gold Fix <XAUFIX=> 1154.50 0.50 0.0 1104 4.6
Silver Fix <XAGFIX=> 18.35 46.00 2.6 16.99 8.0
Platinum Fix <XPTFIX=> 1752.00 1.00 0.1 1466 19.5
Palladium Fix<XPDFIX=> 571.00 1.00 0.2 402 42.0
(Reporting by Frank Tang and Jan Harvey)
