* Gold edges down after early bargain hunting subsides
* Bullion hovers above 50- and 100-day moving averages
* China says will be prudent in buying gold
* Coming Up: Redbook weekly U.S. retail sales, 1355 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, March 9 (Reuters) - Gold edged down on Tuesday
as early bargain hunting subsided, and dealers said a weaker
U.S. dollar was probably needed to help the metal break free
from its current range.
Speculators, who have built up positions in New York on
worries about Greece's ability to repay its debt, may unwind
holdings further but gold could find support at the current
levels. []
Dealers shrugged off news that China would be prudent in
buying gold as a component of official reserves, which was in
line with market thinking the country would not buy bullion in
the open market, as it costs less to buy from domestic mines.
Spot gold <XAU=> hit an intraday high of $1,124.30 an ounce
and was at $1,120.40 by 0253 GMT, down $2.45 from New York's
notional close on Monday, when it fell 1 percent.
Bullion was also around 1 percent below a 6-1/2-week high
near $1,150 an ounce hit in early March.
Safe-haven buying ignited by a sovereign debt crisis in
Greece had pushed up prices as the inverse relation between
gold and the dollar began to weaken but dealers said bullion
could still turn to currencies for direction.
"It's still trading above the 50- and 100-day moving
average, which is encouraging. If they can stay above $1,110,
you know there's a chance it could move back up towards
$1,150," said Mark Pervan, senior commodities analyst at ANZ in
Melbourne.
"The gold market has been more influenced by safe haven
rather than currency issues. But if we swing back to currency
issues, then it will need a weaker dollar to trade through
$1,150 again," said Pervan, referring to a January high.
The euro <EUR=> eased to $1.3614 from $1.3629 late in New
York on Monday, when it gained marginally. The euro's advances
were capped after Greek Prime Minister George Papandreou warned
that a worsening of the Greek crisis could lead to a new global
financial meltdown. [] [].
U.S. gold futures for April delivery <GCJ0> fell $2 to
$1,122 an ounce, having ended 1 percent lower on technical
selling.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,116.120 tonnes
as of March 8, unchanged from the previous business day.
[]
Platinum <XPT=> and palladium <XPD=> slipped but held near
their recent highs on hopes of steady demand from autocatalysts
following robust sales figures in major gasoline markets in
China and the United States.
Yi Gang, head of China's State Administration of Foreign
Exchange, said the country would face serious constraints if it
wanted to increase its gold holdings because the acquisitions
would push up the price of the precious metal. []
The market has long been rife with speculation that China
will seek to diversify its foreign exchange reserves in part by
buying more gold abroad.
"I think the market wants the signs from the currency
markets whether the dollar is going north or south," said a
dealer in Hong Kong.
"The market discounts the China story. It's an old story. I
don't think China will buy gold in the open market. They will
buy gold from their own mines," he added.
China's gold output jumped 11.34 percent to a record of
313.98 tonnes in 2009, the China Gold Association has saud,
securing the country's position as the world's largest producer
of the yellow metal. []
U.S. crude futures edged down on Tuesday after hitting an
8-week high above $82 a barrel on Monday, ahead of industry
data expected to show another rise in U.S. crude inventories.
[]
Precious metals prices at 0253 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1120.40 -2.45 -0.22 2.25
Spot Silver 17.13 -0.08 -0.46 1.78
Spot Platinum 1582.25 -13.25 -0.83 7.86
Spot Palladium 464.75 -5.25 -1.12 14.61
TOCOM Gold 3249.00 -61.00 -1.84 -0.31
28615
TOCOM Platinum 4562.00 -34.00 -0.74 4.13
16406
TOCOM Silver 50.20 -1.00 -1.95 -2.90
417
TOCOM Palladium 1343.00 -32.00 -2.33 15.28
428
Euro/Dollar 1.3612
Dollar/Yen 89.93
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
