* Gold retreats after record in dollar, euro, sterling terms
* Dollar pares losses versus the euro after ECB comments
* Shanghai gold exchange to launch palladium trading
(Updates prices, releads, adds comment)
By Jan Harvey
LONDON, Dec 3 (Reuters) - Gold prices retreated from record
highs in Europe on Thursday, coming under pressure as the euro
pared gains against the dollar after comments from the European
Central Bank on monetary policy.
Spot gold <XAU=> fell as low as $1,203.90 an ounce after the
remarks, and was at $1,206.00 at 1521 GMT, versus $1,215.90 late
on Wednesday. Earlier it hit a record high of $1,226.10.
The dollar extended gains against the yen, and the euro gave
up some of its earlier gains against the greenback, as markets
weighed mixed remarks from the ECB president Jean-Claude Trichet
about possible exit strategies from quantitative easing.
"The dollar is the key input into the gold price, and if we
see a strengthening dollar, obviously gold tends to weaken,"
said Jeremy East, head of metals trading at Standard Chartered.
He said gold was due to take a breather after its sharp run
higher of recent weeks.
"This last move up to $1,226 has been a big one, and we just
can't carry on in a straight line," he said. "I think we are due
for a retracement, and some consolidation."
A poll of 33 analysts, traders and funds conducted by
Reuters this week found most believe gold prices are in for a
correction before the end of the year, though the precious
metal's bull run is still believed to be intact. []
Dollar weakness earlier added fuel to a cross-currency rally
in gold prices, sparked by talk of fresh central bank buying and
supported by fears over the inflation outlook and a broad-based
rise in commodity prices.
Saxo Bank senior manager Ole Hansen said a raft of factors,
including central bank buying and fears over the currency
markets, were supporting gold. He said the metal was ignoring
its usual technical indicators as it moves further above
previous record levels.
"We are into new territory every time we make new highs,"
said Hansen. "It is easy to break up a percent, because there
are no levels to look for as resistance."
"The way gold is going, despite showing overbought, just
indicates that it is something one shouldn't really get in the
way of. All the forces are at play for gold."
CENBANKS EYED
Gold hit record highs in euro and sterling terms as well as
in the dollar. Euro-priced gold <XAUEUR=R> reached a peak of
812.43 euros an ounce, while gold denominated in sterling
<XAUGBP=R> hit a high of 735.20 pounds an ounce.
For graphic of gold's performance in other currencies, click
on: http://graphics.thomsonreuters.com/129/GLD_CURR1209.gif
Gold analysts say they are watching for signs of further
central bank gold buying, after India's 200-tonne purchase
announced in early November and subsequent small acquisitions by
Sri Lanka, Mauritius and Russia sparked a sharp prices rise.
A Chinese industry executive said on Thursday there is more
scope for China to increase purchasing gold, but not in the open
market and only over a longer-term period. []
Among other precious metals, silver <XAG=> was at $18.83 an
ounce against $19.20. The world's main silver exchange-traded
fund, the iShares Silver Trust <SLV>, said its silver holdings
fell 3.49 tonnes from record levels on Wednesday. []
Spot platinum <XPT=> was at $1,489.50 an ounce against
$1,500.50, while palladium <XPD=> was at $382 versus $387.50.
The Shanghai Gold Exchange is to begin trading palladium,
the exchange chairman told a conference on Thursday. "The
government approval process is nearing an end," he said.
[]
(Editing by Anthony Barker)
((jan.harvey@thomsonreuters.com; +44 207 542 7744; Reuters
Messaging: jan.harvey.reuters.com@reuters.net))
