* SPDR holdings down for a third consecutive day
* Gold may face consolidation; long-term trend intact
* Coming up: U.S. Fed releases Sept meeting minutes; 1800
GMT
(Updates prices; adds background in para 18)
By Rujun Shen
SINGAPORE, Oct 12 (Reuters) - Gold prices fell half a
percent on Tuesday, pressured by a rebound in the dollar, and
gold might enter a phase of consolidation after record-breaking
rally.
The dollar held its ground against the euro and a basket of
currencies on Tuesday, showing signs it may retain near-term
gains from a short-covering bounce as players take some short
positions off the table. []
The weakening dollar has helped fuel the rally in most
commodities in the past few months, pushing gold to continuous
record highs and copper to its highest in more than two years.
"Fundamentally the story remains intact for gold. I still
think gold will trade at $1,500 and will trade higher than that
in the medium-term future," said a Singapore-based trader.
"But at the moment, i think the market is too long and too
bullish. We might see the rally capped and the downside may
expand a little further."
Spot gold <XAU=> was trading at $1,346 an ounce by 0617
GMT, down 0.5 percent from the previous close. Gold hit an
all-time high of $1,364.6 last week.
U.S. gold futures <GCZ0> fell 0.6 percent to $1,346.8.
Spot gold is expected to return to the Oct. 8 low of
$1,324.85 per ounce, as it could be rangebound between
$1,234.85 and $1,364.60 for a few trading sessions, said Wang
Tao, a Reuters market analyst. []
For a graphic of the 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT/20101210085907.jpg
"We are likely to see some consolidation in the short term
after the strong rally, before prices head higher again. The
level around $1,300 would lend very strong support," said Hou
Xinqiang, an analyst at Jinrui Futures in China.
"So as long as we continue to see disappointing data, which
points to a feeble economic recovery, the strength in gold will
remain."
A slowdown in economic growth in the world's developed
countries looks increasingly likely, the OECD said on Monday,
highlighting signs the recovery may now have peaked in the
United States. []
Investors are eyeing the minutes from the Federal Reserve's
September policy meeting, due later on Tuesday, for clues to
the possibility of further monetary easing by the central
government.
But speculation on the second round of quantitative easing
from the Fed has been priced in for the past few weeks, and the
market is now on the lookout for stimulating news, said
traders.
Holdings in the SPDR Gold Trust declined for a third
consecutive session to 1,287.327 tonnes by Oct. 11. []
Physical demand in Asia remains robust, as seasonal strong
demand from India and China lends support, traders and analysts
said.
"We might see a little consolidation, but $1,340 is a good
support level where a lot of buying would emerge," said a Hong
Kong-based dealer.
India's Shree Ganesh Jewellery House Ltd <SHRG.BO>, a
jewellerymaker and exporter, plans to tie up with a European
company for a gold refinery with 50-70 tonnes per annum
capacity, expected to be operational by March 2011.
[]
Spot silver <XAG=> fell 1.2 percent to $23.01 an ounce,
down from a 30-year high of $23.65 hit on Monday.
Precious metals prices at 0617 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1346.00 -6.95 -0.51 22.84
Spot Silver 23.01 -0.28 -1.20 36.72
Spot Platinum 1681.45 -1.70 -0.10 14.62
Spot Palladium 580.05 -5.40 -0.92 43.05
TOCOM Gold 3549.00 13.00 +0.37 8.90
49511
TOCOM Platinum 4459.00 -43.00 -0.96 1.78
16911
TOCOM Silver 60.60 0.60 +1.00 17.21
1248
TOCOM Palladium 1536.00 -13.00 -0.84 31.85
669
Euro/Dollar 1.3818
Dollar/Yen 81.80
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
