* Gold briefly drops below $1,000/oz as dollar firms
* Pressured by record speculative positioning in futures
* IMF members formally endorse gold sale; China in focus
(Recasts, updates with closing prices, market activity and
quotes, adds NEW YORK dateline/byline)
By Frank Tang and Humeyra Pamuk
NEW YORK/LONDON, Sept 21 (Reuters) - Gold prices fell to a
near one-week low on Monday, briefly dropping below $1,000 an
ounce, as a dollar rally and record speculative positioning in
the New York gold futures market prompted profit taking.
Prices hit their weakest level since Sept. 15 at $995.50,
far from the 18-month high struck last week at $1,023.85.
However, gold has still gained around 14 percent this year.
Analysts said concern was growing on the extent of
speculative positioning, or short-term buying to profit from
any upward moves in prices, as that left gold vulnerable to
sharp corrections if currency fundamentals moved against it.
"The market is a bit wary of adding new longs after the
highs of last week," Standard Bank analyst Walter De Wet said.
"Given that the spec positions in all of these metals is
really very high, without substantial dollar weakness we won't
move much higher," he added.
Data from the U.S. Commodities Futures Trading Commission
showed speculators held a record net long position in the U.S.
gold futures market for the week ended Sept. 15.
[]
U.S. December gold <GCZ9> settled $5.40 lower at $1,004.90
an ounce on the COMEX division of the New York Mercantile
Exchange. Spot gold <XAU=>was at $1,002.90 an ounce at 2:30
p.m. EDT (1830 GMT), versus $1,006.15 an ounce late in New York
on Friday.
The dollar rose broadly, extending its pullback from a
one-year low against the euro <EUR=>. Gold and the U.S.
currency often moves in opposite directions as bullion is used
by investors as a currency hedge.
Analysts also said selling pressure from the physical
market had weighed on bullion, setting back the quest to strike
highs above $1,030.80 an ounce -- the record level hit in March
2008.
IMF ENDORSES GOLD SALES
On Friday, International Monetary Fund member countries
formally endorsed a plan for strictly limited sales of 403.3
tonnes of gold from its stockpile but the IMF said sales would
be done in a way that did not disrupt gold markets.
[]
The gold market already has factored in the formal approval
of IMF gold sales. Most traders do not expect any significant
negative effect on prices because any transactions will be done
within the existing central bank gold sales agreement.
On Monday, Market News International reported that China
was considering buying gold being offered for sale by the IMF,
citing two unnamed government sources, but the report could not
be confirmed and traders said it had little lasting impact on
the market. []
While concerns about speculative positioning remain, most
analysts agreed that upside momentum was still intact, with
long-term inflation fears still stalking investors.
In other metals, silver was at $16.85 an ounce, in line
with gold, compared with Friday's $16.96.
Palladium <XPD=> was at $294.50 an ounce, versus $299.50 on
Friday. It hit $304 an ounce last week, its highest level since
August 2008. Platinum <XPT=> fell to $1,316.50 an ounce from
its previous finish of $1,327.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCZ9> 1004.90 -5.4 -0.5 884.3 13.6
US silver <SIZ9> 16.880 -0.185 -1.1 11.295 49.4
US platinum <PLV9> 1322.20 -16.00 -1.2 941.50 40.4
US palladium <PAZ9> 299.15 -5.35 -1.8 188.70 58.5
Prices at 2:30 p.m. EDT (1830 GMT)
Gold <XAU=> 1003.00 -3.15 -0.3 878.20 14.2
Silver <XAG=> 16.85 -0.11 -0.6 11.30 49.1
Platinum <XPT=> 1316.50 -10.50 -0.8 924.50 42.4
Palladium <XPD=> 294.50 -5.000 -1.7 184.50 59.6
Gold Fix <XAUFIX=> 997.00 -2.25 -0.2 836.50 19.2
Silver Fix <XAGFIX=> 16.68 -43.00 -2.5 14.76 13.0
Platinum Fix <XPTFIX=> 1310.00 3.00 0.2 1529 -14.3
Palladium Fix <XPDFIX=> 294.00 4.00 1.3 365.0 -19.5
(Additional reporting by Lewa Pardomuan in Singapore and
Veronica Brown in London; Editing by Walter Bagley)
