(Refiles to add dropped words in paragraph 19)
* Gold under more pressure as dollar rises
* Role as a safe-haven investment in doubt
* Silver, PGMs also lower
* Coming up: U.S. ADP national employment April; 1215 GMT
(Adds details, updates prices to afternoon)
By James Regan
SYDNEY, May 5 (Reuters) - Gold forfeited its safe-haven
status to the dollar on Wednesday, continuing to give up ground
after dropping sharply overnight in step with a broad sell-off
in commodities and stocks.
Gold is being grouped with risky investments that have been
sold off amid worries over Greece's aid package and the ability
of other eurozone countries to keep clear of the contagion.
However the dollar, considered a safe haven investment mainly
through the purchase of U.S. treasuries, remains in favour.
"The dollar's taking the steam out of gold again today," said a
bullion dealer in Sydney, adding that the greenback's surge had
caused investors with long gold positions to liquidate.
"Right now it's a currency play more than anything else."
Spot gold <XAU=> was quoted at $1,170.55 at 0701 GMT versus
Tuesday's notional close of $1,170.65. Bullion hit a session
low of $1,166.40 an ounce, Reuters data shows.
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the NYMEX were quoted at $1,171.50 versus Tuesday's
settlement price of 1,169.20.
Gold has failed at trend line resistance at $1,183 per
ounce, and is expected to retrace towards support at $1,160.88,
based on Reuters analysis. []
A drop below $1,160 signals gold could retrace further to
the lower trend line support at $1,156.
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For a graphic showing the gold technical outlook, see:
http://graphics.thomsonreuters.com/gfx/WT_20100405165107.jpg
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News on Tuesday that the International Monetary Fund sold
18.5 tonnes of gold in March versus 5.6 tonnes in February also
acted as negative. []
The euro <EUR=> sank to a new one-year low, with its
sell-off deepening as fears about contagion in the euro zone
gripped investors, while the dollar was the chief beneficiary
of the rising risk aversion.
The dollar hit a one-year high against a basket of six big
currencies <.DXY> and climbed to its strongest since last May
against the Swiss franc
Specifically, gold failed to attract safe haven buying
after the euro-dollar exchange rate fell below 1.30, according
to Credit Suisse.
"Sentiment across precious metals markets is likely to
remain fragile, with risk appetite currently being the major
driver in the sector," Credit Suisse said in market comment.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing gold's performance in currencies other
than the U.S. dollar, click on:
http://graphics.thomsonreuters.com/10/GLD_CRRJH0510.gif
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Greece has signed up to a package of austerity measures
designed to cut its deficit by 11 percentage points between
2009 and 2014, an aim that will deepen the recession and could
spark a social backlash.
The measures agreed this weekend with the EU and IMF
include more tax hikes and steeper cuts in wages and bonuses,
in return for a record 110 billion euro ($146.5 billion)
bailout. []
Oil was also down on the rising dollar, heading towards $82
a barrel and extending the steepest one-day percentage loss in
three months on Tuesday.
With the dollar gaining more ground, investors were shying
away from gold. Earlier this week, they had been buying bullion
on concerns that a 110 billion euro bailout for Greece may not
be enough to resolve its financial crisis, and that other euro
zone economies like Spain may also be hit by debt problems.
Traders said the dollar was helped by data released on Tuesday
that showed pending U.S. home sales rose 5.3 percent in March
while factory orders rose 1.3 percent. Both numbers beat
forecasts. []
Investors expect Friday's U.S. payrolls report to show
another month of job gains in April. Strong economic data has
reinforced views that the Federal Reserve could raise interest
rates from near zero this year, while Europe's debt woes are
likely to keep euro zone rates on hold in 2010. []
Silver prices <XAG=> dropped 9 cents to $17.79 an ounce.
Platinum <XPT=> fell $4 to $1,673.50 an ounce, while palladium
<XPD=> was $6 lower at $507.50.
Precious metals prices at 0700 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1170.90 0.25 +0.02 6.86
Spot Silver 17.80 -0.04 -0.22 5.76
Spot Platinum 1681.00 12.50 +0.75 14.59
Spot Palladium 511.00 -4.50 -0.87 26.02
TOCOM Gold 3581.00 26.00 +0.73 9.88
17217
TOCOM Platinum 5260.00 22.00 +0.42 19.95
3844
TOCOM Silver 57.00 0.60 +1.06 10.25
84
TOCOM Palladium 1664.00 -1.00 -0.06 42.83
138 Euro/Dollar 1.2985 Dollar/Yen 94.90 TOCOM
prices in yen per gram, except TOCOM silver which is priced in
yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ed Lane)
