* Gold falls further on firm dollar, silver off peak
* Technical point downward to $1,295.50 []
* Coming Up: U.S. ISM N-Mfg PMI Sep; 1400 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Oct 5 (Reuters) - Gold extended losses on
Tuesday as renewed concerns about euro-zone debt put pressure
on the euro and offset hopes of further monetary easing in the
United States.
A slight decline in ETF holdings also weighed on gold,
which struck a lifetime high last week. Silver eased after
rising to another 30-year high the previous day, but the metal
has gained in popularity as a cheaper alternative to bullion
for investment.
Spot gold <XAU=> fell 65 cents to $1,314.55 an ounce by
0332 GMT, down from a lifetime high around $1,320 hit last
Friday. Gold has gained as much as 20 percent this year, partly
driven by expectations the Federal Reserve would take fresh
steps to aid the economy.
"I think gold is consolidating. This is also related to the
euro which has dropped below $1.37," said Dick Poon, manager at
Heraeus in Hong Kong.
"It seems there's for profit taking for the time being. I
don't see a substantial decline," said Poon, adding that
selling on the physical market was also limited.
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For a 24-hour gold technical outlook, see:
http://graphics.thomsonreuters.com/WT/20100510085238.jpg
For a Q+A on gold's trend, click []
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U.S. gold futures for December delivery <GCZ0> slipped $2.5
an ounce to $1,314.3 after settling $1 lower on Monday as news
from Ireland, Portugal and Greece put pressure on the euro.
The euro fell 0.2 percent to around $1.3660 on Tuesday,
extending losses after it hit a 6 1/2-month high around $1.38.
The euro had rallied against a broadly weakening dollar on
expectations the Fed will wade into quantitative easing. []
A stronger U.S. currency tends to weigh on
dollar-denominated commodities, making them more expensive for
holders of other currencies.
"I think gold may still be underpinned by some financial
worries in the euro-zone countries. But I think recently, or at
least for this month, gold is actually taking its cue from the
dollar," said a dealer in Singapore.
"That's why gold is under pressure."
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P> said its holdings fell to 1,301.913 tonnes
by Oct 4 from 1,302.345 tonnes on Oct 1. []
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its holdings fell to 9,782.88
tonnes by Oct 4 from a record of 9,786.47 tonnes on Sept 29.
"While the physical market is in surplus, investment demand
has the upper Hand, rebounding along with the rally in the gold
price," BNP Paribas said in a report.
"Looking ahead, we expect the silver price to remain high,
averaging $18.50 an ounce in 2010 and $19.70 an ounce in 2011.
In the short term, however, the silver price is vulnerable to a
correction should gold prices retreat."
London silver fix price reached $25 in September, 1980,
according to The Silver Institute, a U.S.-based industrial
group. Silver is used in jewellery, photography and
electronics.
Precious metals prices at 0332 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1314.55 -0.65 -0.05 19.97
Spot Silver 21.86 -0.11 -0.50 29.89
Spot Platinum 1666.50 1.65 +0.10 13.60
Spot Palladium 557.25 -0.58 -0.10 37.42
TOCOM Gold 3538.00 -4.00 -0.11 8.56
15879
TOCOM Platinum 4492.00 -19.00 -0.42 2.53
7108
TOCOM Silver 59.00 -0.60 -1.01 14.12
285
TOCOM Palladium 1505.00 -24.00 -1.57 29.18
244
Euro/Dollar 1.3655
Dollar/Yen 83.50
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Ed Lane)
(lewa.pardomuan@thomson reuters.com; +65 6870 3834; Reuters
Messaging: lewa.pardomuan.reuters.com@reuters.net))
