* Gold steadies after 1.6 drop on firm euro, physical
buying
* Nikkei drops over 2 pct before trimming losses
* Oil extends losses on demand worries
(Updates prices)
SINGAPORE, Nov 12 (Reuters) - Gold regained some footing on
Wednesday, after dropping more than 1 percent in New York, as
the euro inched up against the U.S. dollar and bargain hunting
resurfaced.
Investors in Japan have been active buyers this week,
partly due to a stronger yen against the U.S. currency which
makes dollar-priced gold bars cheaper to buy. Dealers also
noted buying from jewellers in India, the world's largest
consumer.
Gold <XAU=> was trading at $735.35 an ounce, up $4.60 an
ounce from New York's notional close on Tuesday, when a firmer
dollar, worries about a global recession and weakness in other
commodities sparked selling from speculators.
"Buying from private investors in Japan supports gold.
Funds are getting out of the market but $700 is a big support,"
said Yukuji Sonoda, analyst at Daiichi Commodities in Tokyo,
referring to a level last seen in September 2007.
"There's a very strong actual demand. While the Japanese
are buying ingots, the Indians are buying jewellery products,"
he said.
Gold has bounced more than 7 percent since falling to a
13-month low of $680.80 in October and is struggling to sustain
the uptrend due to a deteriorating global economy and weak
equities, which drove investors to cash in to cover losses.
But dealers said physical buyers would buy on dips and
demand in India was picking up during the wedding season, which
starts in October and lasts through early 2009. []
Bullion is well below a record high of $1,030.80 struck in
March.
"We've seen bits and pieces of buying because of a firming
euro and yen. Part of the buying is done by the Japanese and
there's also bargain buying elsewhere," said a dealer in Hong
Kong.
"I haven't seen much buying from the jewellery sector yet
but we heard demand is pretty good in India. In general overall
trading is kind of sluggish as we approach the year-end," he
said.
Gold jewellery forms an important part of a dowry in India
as parents prefer to give gold to their daughters for financial
security. India devours 800 tonnes of the metal, more than 30
percent of annual global gold mine production, mostly as
jewellery.
In the currency market, the dollar fell to 99.57 yen
<JPY=>, while the euro inched up to $1.2548 <EUR=> after
touching a two-week low of $1.2477 ahead of a G20 summit in
Washington this weekend. []
The Nikkei shed 2 percent on worries about the health of
the global economy. []
Oil extended losses on Wednesday, after settling below $60
for the first time in 20 months the previous day, as fears of
the spreading economic downturn deepened demand worries. []
Platinum <XPT=> was trading at $822.00 ounce, up $9.50 from
New York's notional close on Tuesday.
New York gold futures <GCZ8> added $2.8 an ounce to
$735.6.
Precious metals prices at 0208 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 735.35 4.60 +0.63 -11.69
Spot Silver 9.78 0.04 +0.41 -33.78
Spot Platinum 822.00 9.50 +1.17 -45.92
Spot Palladium 214.00 2.00 +0.94 -41.85
TOCOM Gold 2318.00 -23.00 -0.98 -24.25
17817
TOCOM Platinum 2615.00 8.00 +0.31 -51.02
7795
TOCOM Silver 310.10 -8.50 -2.67 -42.68
150
TOCOM Palladium 698.00 -13.00 -1.83 -48.33
146
Euro/Dollar 1.2571
Dollar/Yen 97.83
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Ben Tan)
