*Gold underpinned above $1,180, demand for alternative stays
*SPDR Gold Trust <GLD> flat due to U.S. holiday []
By Risa Maeda
TOKYO, Nov 27 (Reuters) - Gold fell on Friday after hitting
an all-time high near $1,195 an ounce the previous day, as the
dollar bounced from its 15-month lows against the euro and a
basket of currencies.
But many market players believe the dollar's declining trend
will extend well into next year, and that the downside for the
precious metal, seen as an alternative to the dollar, will be
limited to above $1,180.
Gold was also underpinned by increasing caution among
investors over riskier assets as stocks fell on concerns about
debt problems in Dubai.
Dubai struggled to ease fears of debt default on Thursday
after its move to delay repayments at two flagship firms shook
confidence in the Middle East as a centre for investment and a
source of capital. []
"Gold has not broken above $1,200 just yet. But I think it
could do so any time the currency market turns in favour of
gold," said Tatsufumi Okoshi, senior economist at Nomura
Securities Co.
Spot gold <XAU=> was at $1,187.70 an ounce as of 0251 GMT,
down 0.4 percent from the notional New York close of $1,192.60.
Bullion hit a fresh record high of $1,194.90 on Thursday
before the dollar gained ground on concern about debt problems in
Dubai.
Gold is set to rise 3 percent this week, marking the fourth
straight week of gains.
In the currency market, the euro was at $1.4941 after hitting
a 15-month peak above $1.51 earlier this week.
The dollar was off a 15-month low against a basket of
currencies <.DXY> marked the previous day, although the yen hit a
14-year high of 84.82 yen to the dollar <JPY=> early in the
morning before paring the gains. []
"The currency market is now attracting all of the volatility,
so gold cannot help but follow the ups-and-downs of the dollar,"
Okoshi said. "The yields of U.S. Treasury bonds are low, gains in
stocks have been limited and gold is the sole asset investors can
buy now," he added.
Bullion has risen more than 37 percent this year, including a
13 percent rise in November alone on dollar weakness,
expectations of further reserve diversification by central banks
and fears of inflation next year.
Many expect that more central banks in developing countries
will diversify their foreign currency reserves to gold.
Sri Lanka's Deputy Finance Minister Sarath Amunugama said in
an interview with Reuters on Thursday the country was considering
buying more gold from the International Monetary Fund.
[]
The IMF said on Wednesday it had sold 10 tonnes of gold to
the Central Bank of Sri Lanka, part of the 403.3 tonnes approved
for sale by the fund's executive board in September. The fund has
already sold 202 tonnes to the central banks of India and
Mauritius. []
U.S. December gold futures <GCZ9> traded at $1,188.40 per
ounce, up 0.1 percent from the previous close.
U.S. markets were closed on Thursday for the Thanksgiving
holiday.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,127.860 tonnes as
of Nov. 25, unchanged due to a holiday on Thursday. []
Precious metals prices at 0253 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1188.00 -4.60 -0.39 34.98
Spot Silver 18.46 -0.15 -0.81 63.07
Spot Platinum 1452.00 0.00 +0.00 55.79
Spot Palladium 366.00 -2.00 -0.54 98.37
TOCOM Gold 3297.00 -44.00 -1.32 28.14 60926
TOCOM Platinum 4034.00 -85.00 -2.06 52.11 17351
TOCOM Silver 512.00 -13.40 -2.55 60.35 646
TOCOM Palladium 1021.00 -29.00 -2.76 85.64 219
Euro/Dollar 1.4940
Dollar/Yen 86.01
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
((risa.maeda@thomsonreuters.com; +81 3 6441 1856; Reuters
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