PRECIOUS-Gold rises towards $1,120/oz as dollar slides

                                
 * Dollar index slides to 15-month lows
                                
 * Vietnam's central bank opts to allow gold imports
                                
 * BarCap technical analysts see gold at $1,500/oz in 2010
                                
 
                                
 (Releads, updates prices)
                                
 By Jan Harvey
                                
 LONDON, Nov 11 (Reuters) - Gold hit record highs near $1,120
an ounce on Wednesday as a dollar index <.DXY> fell to 15-month
lows, with expectations that a U.S. economic recovery will be
erratic seen keeping American interest rates low for a while.
                                
 The metal is now poised for more gains, analysts said, with
the weak dollar helping gold build on a rally that began last
week after the IMF sold 200 tonnes of bullion to India's central
bank, raising the prospect of more official sector buying.
                                
 Spot gold <XAU=> hit a high of $1,117.05 an ounce and was at
$1,114.80 at 1154 GMT versus $1,105.30 late on Tuesday.
                                
 U.S. gold futures for December delivery <GCZ9> on the COMEX
division of the New York Mercantile Exchange rose $12.70 to
$1,115.20 an ounce.
                                
 "The way gold keeps accelerating away from its previous
highs is quite incredible," said Saxo Bank senior manager Ole
Hansen. "Continued momentum is driving prices higher. Whenever
we see new highs, we see more momentum buying."
                                
 The dollar index fell a quarter of a percent to a 15-month
low of 74.831 and the euro rose to a two-week peak within sight
of last month's 2009 high of just over $1.5060. [FRX/]
                                
 Analysts said the dollar was smarting after a chorus of Fed
officials said on Tuesday that high unemployment and sluggish
consumer spending were risks to recovery in the U.S. economy
which may keep the Fed funds rate low.  [ID:nN10315173].
                                
Weakness in the unit boosts gold's appeal as an alternative
asset, and makes dollar-priced commodities cheaper for holders
of other currencies.
                                
 "Dollar weakness is the main trigger this morning," said
 Wolfgang Wrzesniok-Rossbach, head of sales at precious metals
 house Heraeus.
                                
 Gold prices also rose in non-dollar terms. Euro-denominated
gold <XAUEUR=R> reached its highest since March at 742.87 euros.
                                
 
                                
 VIETNAM ALLOWS IMPORTS
                                
 Also helping the market was a report that Vietnam's central
bank will allow imports of gold -- banned since May last year --
after bullion prices rose sharply in recent days, potentially
opening up a new source of demand. [ID:nHAN488466]
                                
 Physical gold demand was relatively slack in Asia, with
traders in India -- the world's biggest bullion consumer last
year -- keeping to the sidelines as prices rose. [ID:nBOM514583]
                                
 "We did a few deals yesterday, but the market has turned
quiet today. Traders are enquiring, but (offers) aren't
materialising," said Pinakin Vyas, chief manager-treasury at
IndusInd Bank in Mumbai.
                                
 Interest in gold exchange-traded funds also remained soft,
with holdings of the largest bullion-backed ETF, New York's SPDR
Gold Trust <GLD>, unchanged on Tuesday. [GOL/SPDR]
                                
 But with the prospect of persistent dollar weakness boosting
fund interest in gold and further central bank bullion purchases
seen as a distinct possibility, the outlook for gold prices is
positive.
                                
 U.S. investment bank Goldman Sachs said on Tuesday gold
could rise to record highs in a range from $1,150 to $1,200 an
ounce, driven by falling real interest rates and renewed buying
interest by central banks. [ID:nN10309317]
                                
 Technical analysts at Barclays Capital, who study past price
movements to determine future direction, said both gold and
dollar charts suggested more gains were on the cards for the
precious metal. "Our sights are on $1,500 in 2010," they said.
                                
 Among other precious metals, spot silver <XAG=> was bid at
$17.59 an ounce against $17.32, tracking gold higher, while
platinum <XPT=> was at $1,365 an ounce against $1,349.50 and
palladium <XPD=> was at $336.65 against $331.50.
                                
 ETF Securities said holdings of its London-based ETFS
Physical Platinum exchange-traded commodity <PHPT.L> rose nearly
10,000 ounces or 2.6 percent on Tuesday.
                                
 
                                
 For graphic of gold's performance in different currencies,
click on:
http://graphics.thomsonreuters.com/119/CMD_GLDCUR1109.gif
                                
 
                                
 For graphic of gold in relation to inflation expectations,
click on:
http://graphics.thomsonreuters.com/119/GLD_TPSS1109.gif
                                
 
                                
 (Additional reporting by Humeyra Pamuk; Editing by Keiron
Henderson)