* 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 the precious metal 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=> had edged up to $1,119.60 an ounce as of
0636 GMT, compared with New York's notional close of $1,118.95.
It rose as high as $1,120.80 on Tuesday, its highest since Feb.
3.
U.S. gold futures for April delivery <GCJ0> were slightly
firmer at $1,120.50 an ounce, compared with $1,119.80 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 812.56 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 <EUR=> steadied on Wednesday to hold sharp gains
made the previous day against the dollar as investors cut short
positions on views that the fall in the euro over Greece's debt
problems had run its course. []
Japan's Nikkei stock average <> rose 2.7 percent for its
biggest one-day gain in more than two months, buoyed by resource
shares such as Mitsubishi Corp <8058.T> and short-covering after
a recent sell-off. []
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 disclosed on
Tuesday in a filing to the U.S. security watchdog that it 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. []
Gold miner AngloGold Ashanti Ltd <ANGJ.J> said on Wednesday
its gold production is seen fallING to 1.07 million ounces in the
first quarter from 1.182 million ounces the previous quarter.
[]
Middle East gold demand in the fourth quarter fell 32 percent
on the year, the World Gold Council said in a report issued on
Wednesday. []
Precious metals prices at 0631 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1119.90 0.95 +0.08 2.21
Spot Silver 16.23 0.11 +0.68 -3.57
Spot Platinum 1545.50 9.00 +0.59 5.35
Spot Palladium 432.50 2.00 +0.46 6.66
TOCOM Gold 3265.00 54.00 +1.68 0.18 57145
TOCOM Platinum 4482.00 90.00 +2.05 2.31 15251
TOCOM Silver 47.80 1.70 +3.69 -7.54 808
TOCOM Palladium 1257.00 34.00 +2.78 7.90 329
Euro/Dollar 1.3766
Dollar/Yen 90.32
TOCOM prices in yen per gram. Spot prices in $ per ounce.
($1=90.01 Yen)
(Additional reporting by Risa Maeda; Editing by Joseph Radford)
