* Gold gives up early gains, investors reap profits
* For the technical outlook on gold, click on
[]
* Coming Up: U.S. April consumer price index; 1230 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, May 19 (Reuters) - Gold dropped despite a
tumbling euro on Wednesday after attempts to revisit last
week's highs failed, stirring concerns the precious metal may
be ripe for a correction.
Gold struck a record of $1,248.95 an ounce on Friday on
fears that euro zone austerity measures could impede, rather
than aid, a recovery. But rises in net long positions in New
York futures to near their peak also suggested the market was
technically overbought. []
Fears of contagion from Greece's debt crisis have driven
gold to a record as investors ditched the euro and bought the
metal as safe haven from volatile currencies and stocks. Gold
has gained around 11 percent this year.
Gold <XAU=> hit an intraday high of $1,227.10 an ounce
before falling to $1,213.70 by 0250 GMT, down $6 from New
York's notional close on Tuesday.
"There's a lot of positive news already priced in the gold.
It's a heavily overbought market," said Mark Pervan, senior
commodities analyst at ANZ.
"The key catalyst would be, I think, still a heightened
level of risk aversion. What you are seeing at the moment is
just profit-taking of near record high levels of futures
markets," he added.
For a graphic showing the gold technical outlook, see:
http://graphics.thomsonreuters.com/gfx/WT_20101905092102.jpg
U.S. gold futures for June delivery <GCM0> fell $1.3 to
$1,213.3 an ounce after hitting a high of $1,228.2 an ounce. It
had hit a one-week low on Tuesday before recovering. []
COMEX open interest rose almost 15,000 lots to an all-time
high above 600,000 lots as of May 17, indicating rising
volatility. <NYMMTLFUT/VOI>
But as worries about Europe's debt crisis lingered, there
was room for bullion to test record levels again. Holdings in
the world's largest gold-backed exchange traded fund, SPDR Gold
Trust <GLD.P>, stood unchanged at a record 1,217.108 tonnes.
[]
"It could retest highs, I think because the fact that the
situation in Europe is not a short-term fix. It's going to be
protracted for the months ahead," said Pervan of the ANZ.
The euro hit a four-year low against the dollar on
Wednesday after Germany's move to ban naked short-selling of
some securities rattled investors. Sterling fell to its lowest
in nearly 14 months. []
Dealers said Germany's regulation would do little to help
fix Europe's debt crisis and would turn investor attention to
the battered euro to express their bearish view on the euro
zone as a whole.
"Some people are unwinding positions in gold but most
investors are bearish on the euro/dollar rate. They are talking
about the euro falling to $1.2," said a bullion dealer in Hong
Kong.
But sales of gold scrap had subsided in Hong Kong as
holders waited for bullion prices to recover, said the dealer,
adding that sales picked up when bullion first revisited $1,200
earlier this month.
Silver <XAG=>, platinum <XPT=> and palladium <XPD=> tracked
gold lower.
London's Platinum Week entered its second day on Tuesday,
with analysts, traders, refiners and recyclers meeting in the
British capital to discuss industry developments.
[]
Precious metals prices at 0250 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1213.70 -6.00 -0.49 10.77
Spot Silver 18.65 -0.25 -1.32 10.81
Spot Platinum 1661.00 -5.50 -0.33 13.22
Spot Palladium 485.25 -9.75 -1.97 19.67
TOCOM Gold 3592.00 -57.00 -1.56 10.22
47928
TOCOM Platinum 4936.00 -106.00 -2.10 12.67
18534
TOCOM Silver 55.60 -1.20 -2.11 7.54
797
TOCOM Palladium 1431.00 -74.00 -4.92 22.83
817
Euro/Dollar 1.2193
Dollar/Yen 91.82
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
