* Gold hits 1-mth high in dollar terms, record peak in euros
* SAfrica to levy royalties on mineral exports from March 1
* Pension funds starting to invest in gold-WGC
* Indian gold imports seen rebounding in 2010
(Releads, updates prices)
By Jan Harvey
LONDON, Feb 17 (Reuters) - Gold rose on Wednesday, supported
by strong investment demand and news that South Africa is to
levy royalties on minerals exports, but the metal pared gains
after above-consensus U.S. housing data lifted the dollar.
Spot gold hit a peak of $1,126.85 an ounce, its highest
since Jan. 20, while euro-priced gold <XAUEUR=R> rose to a
record 820.84 euros an ounce, before fresh gains in the U.S.
currency pressured prices from highs.
Spot gold <XAU=> was bid at $1,122.75 an ounce at 1450 GMT,
against $1,118.95 late in New York on Tuesday. U.S. gold futures
for April delivery <GCJ0> on the COMEX division of the New York
Mercantile Exchange rose $2.70 to $1,122.00 an ounce.
"We have seen stock markets rising," said Peter Fertig, a
consultant at Quantitative Commodity Research. "This indicates
that investors are willing to take on more risk."
He said investment demand was starting to pick up momentum.
"If new investors enter the market, that reassures other
investors that the correction may be over," he added.
The dollar extended gains versus the euro after data showed
U.S. housing starts rose more strongly than expected in January.
While gold's usual inverse correlation with the U.S. unit has
weakened in recent sessions, this pulled it from highs. []
But commodities in general and gold in particular are still
benefiting from fresh investment. Billionaire investor George
Soros' hedge fund more than doubled its bet on gold prices in
the fourth quarter, an SEC filing showed. []
Pension funds started investing actively in gold last year
viewing the metal as a safe long-term investment, the head of
the World Gold Council told Reuters. []
"Investment demand from the United States and a lack of
selling out of Asia are pushing gold up," said Standard Bank
analyst Walter de Wet, adding that a fall in net long positions
in New York gold futures suggested gold had room to rise.
"For most of these commodities, speculative length has
declined substantially, so there is room for more money to flow
in," he said.
OIL CLIMBS
Among other commodities, oil prices extended the previous
session's 3.9 percent gains towards $78 a barrel. Gold tends to
track crude prices, as the metal can be bought as a hedge
against oil-led inflation. []
The World Gold Council said in its hotly-anticipated Gold
Demand Trends report for the fourth quarter of 2009 that
investment appetite for gold was expected to stay firm, though
overall gold demand fell 11 percent in 2009. []
Global central banks will be net gold buyers in 2010 as they
review their reserves policies, the head of the WGC told Reuters
on Wednesday. []
India remained the world's number one gold consumer, it
said, with fourth-quarter consumption rising 13 percent to 180.7
tonnes year-on-year as wedding and festive demand peaked.
India's gold imports for 2010 may rebound to 550 tonnes as
prices steady and the economy revives, a senior official at a
trade body told Reuters on Wednesday. []
On the supply side, South Africa said in its 2010 Budget
Review on Wednesday that it will from March 1 this year levy
mining royalties that were postponed due a recession last year.
South Africa is the second-largest gold producer. []
Among other precious metals, silver <XAG=> was at $16.20 an
ounce against $16.12, platinum <XPT=> at $1,542 an ounce versus
$1,118.95, and palladium <XPD=> at $437.50 versus $430.50.
(Editing by Sue Thomas)
