(Updates prices, adds physical buying)
By Lewa Pardomuan
SINGAPORE, March 12 (Reuters) - Bargain hunters lifted gold
on Wednesday, helping it defy pressure from a recent rebound in
the U.S. dollar and rising stocks, but the precious metal
struggled to break the $1,000 an ounce barrier.
Gold <XAU=> firmed to $974.20/975.00 an ounce from
$971.00/971.80 late in New York on Tuesday, after it earlier
hit a low around $964 when the dollar rose after global central
banks announced plans to boost liquidity in financial markets.
Gold has dropped nearly 2 percent since a spike to a
lifetime high of $991.90 on March 6, but dealers said record
high oil and expectations of further interest rate cuts in the
United States would still attract interest from investors.
"I think we are still talking about $1,000 sometime this
year. There are so many bulls in the market," said Ronald
Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"We can say the market is consolidating. If it goes above
$995, the market will shoot up to $1,000. If it goes below
$955, then it may test $950. There's a bit of bargain hunting
but I think investors really don't know what to do,"said Leung,
referring price volatility.
Gold has gained as much as 19 percent this year.
The physical sector saw buying on dips from jewellers in
Thailand and investors in Vietnam looking for a hedge against
inflation. The world's main consumer, India, remained on the
sidelines.
"I guess gold refuses to head lower. It tried the $960
levels but then physical buyers appeared. But it looks like
gold is stuck at the moment until the big boys decide to lead
the way," said a dealer in Singapore.
The U.S. Federal Reserve and other central banks teamed up
to get hundreds of billions of dollars in funds to cash-starved
credit markets, allowing financial firms to use securities
backed by home mortgages as collateral for central bank loans.
[]
The dollar eased to 103.00 yen <JPY=> but held above an
eight-year low of 101.40 yen struck on electronic trading
platform EBS on Friday.
The Fed's move sparked a rally in stock markets, with
Japanese stocks <> jumping more than 3 percent.
[]
In theory, rising stock markets and a firmer dollar will
diminish gold's appeal as an alternative investment.
Other precious metals were below their recent highs.
Spot platinum <XPT=> fell to $2,032/2,045 an ounce from
$2,050/2,060 late in New York -- off a record high of $2,290
hit on March 4 as speculators booked profits on news that
miners in main producer South Africa would get more supply.
"Platinum is now in a correction phase after seeing massive
fund inflows, but the long-term trend for the market is still
bullish as concerns over supplies stay," said Hiroyuki
Kikukawa, an analyst at IDO Securities in Tokyo.
But Tokyo platinum futures shrugged off a weak cash market
and jumped more 3 percent as the dollar bounced against the
yen.
The benchmark platinum futures contract for February
delivery <0#JPL:> on the Tokyo Commodity Exchange rose 173 yen
per gram to 6,582 yen but off an intraday high of 6,649 yen.
Both cash and Tokyo platinum futures have rallied to record
high on supply fears after an electricity shortage disrupted
mining in South Africa. Spot platinum has risen as much as 50
percent in 2008.
Silver <XAG=> edged up to $19.71/19.76 an ounce from
$19.61/19.66 an ounce. Spot palladium <XPD=> rose to $488/493
an ounce from $486/491 an ounce.
Precious metals prices at 0405 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 974.40 1.40 +0.14 17.02
Spot Silver 19.67 0.02 +0.10 33.18
Spot Platinum 2035.00 -15.00 -0.73 33.88
Spot Palladium 486.00 0.00 +0.00 32.07
TOCOM Gold 3252.00 34.00 +1.06 6.27
28034
TOCOM Platinum 6583.00 174.00 +2.71 23.30
11480
TOCOM Silver 656.00 4.00 +0.61 21.26
770
TOCOM Palladium 1670.00 58.00 +3.60 23.61
7534
Euro/Dollar 1.5360
Dollar/Yen 102.89
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikafumi Hodo in Tokyo; Editing by
Ben Tan)
