* Focus on the euro, whether improving sentiment stays
* SPDR Gold holdings rise 0.3 pct, first rise since Feb 5
By Chikako Mogi
TOKYO, Feb 17 (Reuters) - Gold prices steadied near two-week
highs on Wednesday after rallying on a rise in the euro the day
before, with investors continuing to take their cue from the
single currency for direction.
In the near-term, if investors keep cutting short positions
on the view they had sold the single currency too much on worries
about Greece, there is scope for bullion to test its upside,
traders said.
Spot gold rallied to two-week highs on Tuesday as the euro
recovered from recent hefty losses against the dollar and as
investors snapped up gold to hedge against debt default risks in
Europe.
"As is the case a day after a strong rally, gold has steadied
as investors take a break from buying, but gold is likely to
extend gains as sentiment for the euro is improving," said Tetsu
Emori, general manager at Astmax Co.
The euro's recovery sparked buying in oil and other
commodities as a weaker dollar makes dollar-denominated
commodities cheaper for holders of non-dollar currencies.
Rallying commodities and gains for equities markets also
boosted sentiment, reflecting the return of risk appetite among
investors, traders said.
Spot gold <XAU=> eased 0.3 percent to $1,115.90 an ounce as
of 0247 GMT, compared with New York's notional close of
$1,118.95. Spot gold rose as high as $1,120.80 on Tuesday, its
highest since Feb. 3.
U.S. gold futures for April delivery <GCJ0> also inched down
0.3 percent to $1,116.60 an ounce, compared with $1,119.80 an
ounce on the COMEX division of the New York Mercantile Exchange.
Futures ended up $29.80, or 2.73 percent, on Tuesday at their
highest settlement level since Jan. 19.
Euro-priced gold was at 810.50 euros <XAUEUR=R> an ounce on
Wednesday, slipping from a record high 819.07 euros an ounce hit
the day before. Gold priced in sterling and South African rand
also rose to one-month highs on Tuesday.
European finance ministers said on Tuesday that Greece should
present a report by March 16 setting out a timetable for the
implementation of budget target measures for 2010, and another by
May 15 setting out policy measures needed to comply with the
finance ministers' decision. Quarterly reports will be required
from then on. [][]
"The problems weighing on the euro are not resolved, but it's
also hard to see the euro plunge below recent lows on the Greece
issue alone as the problem has been addressed and steps are being
discussed," Emori said.
The euro held steady on Wednesday after rebounding against
the dollar to post its biggest one-day gain since July the day
before, as traders bet the single currency had slipped too far in
recent weeks over worries about Greece's public finances. []
The Nikkei stock average <> rose 2.1 percent, following
gains in U.S stocks, which posted their biggest daily percentage
gain in three months on Tuesday. [] []
The rise in gold market spurred investment demand, with
holdings at the world's largest gold-backed exchange-traded fund,
SPDR Gold Trust <GLD>, rising 0.3 percent or 3.046 tonnes from
the previous business day to 1,109.424 tonnes as of Feb. 16. It
was the first increase in holdings since Feb. 5. []
Billionaire investor George Soros' hedge fund owned 6.2
million shares of SPDR Gold Trust <GLD.P> at the end of the year
worth $663 million, up from 2.5 million shares at the end of the
third quarter. []
Precious metals prices at 0303 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1116.40 -2.55 -0.23 1.89
Spot Silver 16.07 -0.05 -0.31 -4.52
Spot Platinum 1541.00 4.50 +0.29 5.04
Spot Palladium 429.75 -0.75 -0.17 5.98
TOCOM Gold 3251.00 40.00 +1.25 -0.25 40644
TOCOM Platinum 4472.00 80.00 +1.82 2.08 9601
TOCOM Silver 47.30 1.20 +2.60 -8.51 333
TOCOM Palladium 1250.00 27.00 +2.21 7.30 237
Euro/Dollar 1.3765
Dollar/Yen 90.29
TOCOM prices in yen per gram. Spot prices in $ per ounce.
($1=90.01 Yen)
(Editing by Edwina Gibbs)
