* Market liquidity to drain as year-end approaches
* Gold to rebound to $1,394-$1,401 - technicals
[]
* Coming up: U.S. initial claims, weekly; 1330 GMT
(Adds comment, detail; updates prices)
By Rujun Shen
SINGAPORE, Dec 9 (Reuters) - Spot gold firmed a notch on
Thursday, after sliding more than one percent in the previous
session, as a dollar rally paused, and resilient physical
demand in Asia provided support.
The U.S. dollar weakened in Asia on Thursday but is
still seen supported thanks to higher Treasury bond yields,
after an agreement to extend tax cuts fed fears of inflation
and a swelling deficit. []
"The rise in U.S. treasury yield triggered some long
liquidation in metals, not only in gold. If you look at the
commodities as whole, there's profit-taking," said a Hong
Kong-based trader.
Traders said as the year end approaches, market liquidity
is expected to thin out and participants are increasingly
square books to take profit before the holidays.
"In the short term things are turning a little bit
bearish, after testing the record high on Tuesday. It would
not be a surprise even if it correct even further and test the
short-term support around $1,370."
Spot gold gained 0.4 percent to $1,386.75 an ounce
by 0258 GMT, after falling to a one-week low of $1,371.45 on
Wednesday.
It reached an all-time high of $1,430.95 on Tuesday.
U.S. gold futures edged up 0.3 percent to $1,387.6.
Spot gold is expected to rebound into a range of
$1,394 and $1,401, as an ascending trendline provides support
to hold up the sharp correction, said Wang Tao, a Reuters
market analyst. []
For a 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT/20100912092848.jpg
Light physical buying was spotted in early Asian trade,
while scrap selling was limited, trades said.
"Interestingly we don't see too much gold scrap falling
back into the market, after price hit record high. Everybody
is still bullish," said Dick Poon, manager of precious metals
at Hareaus in Hong Kong.
Poon said physical buying from manufacturers has subsided,
while investors, betting on further price rise, continued to
buy on the dip.
Premium in Hong Kong for the bullion was little changed at
80 cents to $1 above London prices, Poon added.
Holdings in the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust , continued to
slip, down 2.43 tonnes to $1,295.296 tonnes by Dec 8.
On base metals market, three-month copper on the London
Metal Exchange hit a record high of $9,066 a tonne,
underpinned by solid fundamentals.
Spot silver rose one percent to $28.62 an ounce,
after declining to a one-week low of $27.96 in the previous
session.
Precious metals prices at 0258 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1386.75 5.26 +0.38 26.56
Spot Silver 28.62 0.29 +1.02 70.05
Spot Platinum 1679.49 -1.25 -0.07 14.48
Spot Palladium 730.47 6.50 +0.90 80.14
TOCOM Gold 3744.00 -24.00 -0.64 14.88 40121
TOCOM Platinum 4574.00 -20.00 -0.44 4.41 5463
TOCOM Silver 77.50 -1.00 -1.27 49.90 1712
TOCOM Palladium 1991.00 11.00 +0.56 70.90 393
Euro/Dollar 1.3302
Dollar/Yen 83.78
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting By Rujun Shen; Editing by Ed Lane)
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