* Unexpected plunge in U.S. new home sales pressures gold
* Bernanke says interest rate to stay low for a while
* Eskom wins approval for S.African power tariff increase
(Recasts, updates prices, market activity to close; adds
second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 24 (Reuters) - Gold dropped for a
second straight day on Wednesday, settling below $1,100 as data
showing a sharp fall in U.S. new home sales hit sentiment among
bullion investors.
Investors reduced exposure to gold as the dollar cut losses
against the euro after the weak U.S. housing data. Also,
Federal Reserve Chairman Ben Bernanke offered a somber
assessment of the U.S. economy.[]
"Failed rallies of the euro have gotten gold investors a
bit skittish, and there is a flight to quality back into the
dollar," said Frank McGhee, head precious metals trader at
Integrated Brokerage Services LLC.
Spot gold <XAU=> was $1,094.20 at 3:27 p.m. EST (2027 GMT),
against $1,102.95 late in New York on Tuesday. Earlier, the
metal hit its weakest since Feb. 12 at $1,089.45 an ounce after
a break of key resistance levels just below $1,100 an ounce
prompted selling.
Bullion, traditionally seen as a safe haven in times of
economic uncertainty, has been moving in tandem with asset
classes perceived as riskier, including equities and other
commodities such as oil.
S.AFRICAN POWER ISSUE BOOSTS PGMS
A drop in bullion prices spurred some buying in parts of
Asia, but main consumer India was on the sidelines. A lack of
activity in China after the Lunar New Year holidays also put
pressure on premiums. []
The China Daily reported on Wednesday that China was
unlikely to buy 191.3 tonnes of gold being offered for sale by
the International Monetary Fund. [] The report
cited an unnamed official from the China Gold Association.
Silver <XAG=> was at $15.85, up slightly from $15.82 an
ounce. Platinum <XPT=> at $1,504 an ounce, down from $1,510 and
palladium <XPD=> slipped to $419.50 from $428.50.
South Africa's power regulator granted state-owned utility
Eskom a 24.8 percent tariff increase for the 2010-11 financial
year, falling short of the power firm's request for a 35
percent hike. []
South Africa is the world's biggest platinum producer and
one of the leading miners of palladium and gold.
"(This) will make mining in South Africa a bit more
expensive, but in the long run it will make it more reliable as
well," said one European platinum group metals trader.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCJ0> 1097.20 -6 -0.5 1096.20 0.1
US silver <SIH0> 15.940 0.052 0.3 16.845 -5.4
US platinum <PLJ0> 1507.30 -3.00 -0.2 1471.00 2.5
US palladium <PAH0> 422.70 -11.30 -2.6 408.85 3.4
Prices at 3:54 p.m. EST (2054 GMT)
Gold <XAU=> 1096.05 -6.90 -0.6 1096.35 0.0
Silver <XAG=> 15.88 0.06 0.4 16.84 -5.7
Platinum <XPT=> 1506.00 -4.00 -0.3 1465.50 2.8
Palladium <XPD=> 420.50 -8.000 -1.9 405.50 3.7
Gold Fix <XAUFIX=> 1103.00 10.00 0.9 1104 -0.1
Silver Fix <XAGFIX=> 15.76 -34.00 -2.1 16.99 -7.2
Platinum Fix <XPTFIX=> 1504.00 7.00 0.5 1466 2.6
Palladium Fix<XPDFIX=> 427.00 2.00 0.5 402 6.2
(Reporting by Frank Tang in New York and Jan Harvey in London;
Editing by David Gregorio)
