* Gold up tad on renewed central banks buying interest
* Dollar rebound limits further gains in bullion
* Gold may hit $1,200/oz on low interest rates - Goldman
(Recasts, updates comments, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Nov 10 (Reuters) - Gold rose slightly in
choppy trade Tuesday on renewed buying interest amid central
banks, but a dollar bounce decreased the precious metal's
appeal as a hedge against a depreciating U.S. currency.
The metal found support from strong investor interest after
the International Monetary Fund announced last week it had sold
200 tonnes of gold to India's central bank, which prompted the
metal to reach record highs.
The precious metal hit a record high of $1,110.85 an ounce
on Monday as the dollar index, which measures the U.S.
currency's performance against a basket of six others, slipped
to its lowest level since August 2008.
"Given all the noises hedge funds have been making, plus
all the noise surrounding further potential central bank
buying, it is difficult to see much of a downside," said
Societe Generale analyst David Wilson.
Spot gold <XAU=> was at $1,104.30 an ounce at 2:26 p.m. EST
(1926 GMT), against $1,103.85 late in New York on Monday.
U.S. December gold futures <GCZ9> settled up $1.10 at
$1,102.50 an ounce on the COMEX division of the NYMEX.
Gold struggled to break new ground as the dollar rebounded
slightly on Tuesday, with investors fearing the U.S. currency's
fall on Monday was overdone.
However, expectations the dollar will be unable to sustain
gains is helping underpin bullion's prices.
Strength in the U.S. currency dampens gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies. The dollar remains
susceptible to further losses, analysts said.
"My feeling is we will actually see the dollar break down
further in the next few weeks, and that will help take gold up
to new levels," said Standard Chartered analyst Daniel Smith.
U.S. investment bank Goldman Sachs <GS.N> said gold could
rise to record highs in a range from $1,150 to $1,200 an ounce,
driven by declining real interest rates and renewed buying
interest by central banks. []
DEMAND PICKS UP
Some physical demand for gold entered into the market, with
holdings of the world's largest exchange-traded fund, the SPDR
Gold Trust <GLD> in New York, rising just over 6 tonnes on
Monday. []
ETFs issue securities backed by physical stocks of an
asset, and have proved a popular way for buyers to invest in
gold this year without having to take delivery of the metal.
Gold buying in India, the world's biggest bullion market
last year, ticked higher as early strength in the rupee helped
the metal, dealers said. []
Among other precious metals, silver <XAG=> was at $17.28 an
ounce against its previous session's late quote of $17.57. But
the metal is well positioned for gains, according to technical
analysts who study past price movements to determine the future
direction of trade.
The gold-to-silver ratio rose to 63.2 at the end of last
week, against 60.7 at the end of September, suggesting silver
has become cheaper relative to gold.
Platinum <XPT=> was at $1,342 an ounce against $1,357.50,
while palladium <XPD=> was at $332.55 against $331. Both metals
are primarily used in autocatalysts and have benefited from
perceptions the economy is recovering.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1102.50 1.1 0.1 884.3 24.7
US silver <SIZ9> 17.222 -0.258 -1.5 11.295 52.5
US platinum <PLF0> 1351.20 -16.00 -1.2 941.50 43.5
US palladium <PAZ9> 335.20 -0.75 -0.2 188.70 77.6
Prices at 2:01 p.m. EST (1901 GMT)
Gold <XAU=> 1102.50 -1.35 -0.1 878.20 25.5
Silver <XAG=> 17.24 -0.33 -1.9 11.30 52.6
Platinum <XPT=> 1342.00 -15.50 -1.1 924.50 45.2
Palladium <XPD=> 331.00 0.000 0.0 184.50 79.4
Gold Fix <XAUFIX=> 1101.50 1.75 0.2 836.50 31.7
Silver Fix <XAGFIX=> 17.26 -42.00 -2.4 14.76 16.9
Platinum Fix <XPTFIX=> 1354.00 0.00 0.0 1529 -11.4
Palladium Fix<XPDFIX=> 333.00 1.00 0.3 365.0 -8.8
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
