(Repeats to additional subscribers)
* Gold extends losses to more than 4 pct
* Equities, commodities slide on Dubai worries
* SPDR Gold Trust <GLD> flat due to U.S. holiday []
*
http://graphics.thomsonreuters.com/119/MKT_GLD$OIL1109.gif
By Risa Maeda
TOKYO, Nov 27 (Reuters) - Gold prices accelerated declines
to fall 4.7 percent on Friday before recoiling slightly, as
worries over debt problems in Dubai drove investors to cut
positions, unleashing a broad sell-off across assets from
commodities to equities.
The Dubai worries pushed Asian equities outside Japan down
more than 4 percent, led by a 5 percent fall in Hong Kong's
Hang Seng Index <>, while oil prices shed more than 5
percent.
Gold's fall, its biggest single-day drop in a year, dragged
its sister metal silver down about 5 percent <XAG=> while
platinum <XPT=> fell 2 percent.
The selling in risk assets intensified as the dollar
rebounded 1 percent against a basket of major currencies, with
concerns over Dubai's debt problems prompting traders to slash
risk exposure and unwind dollar-funded carry trades. []
Market players who believe the dollar's declining trend
will extend well into next year are willing to buy gold on
dips, possibly slowing the precious metal's slide.
Gold also receives support from increasing caution among
investors over riskier assets as stocks fall, traders said.
"The Dubai issue reminded people of the risk of new
economies, resulting in a sell-off in stocks and an inflow of
money into the dollar," said Tetsu Emori, a fund manager at
Tokyo-based Astmax Co.
"But gold is suffering less than other commodities or
stocks are, and that underlines gold's relative value and
investor confidence over its role as a risk hedge," he said.
Traders said the focus is on how U.S. markets will react
after returning from Thursday's Thanksgiving holiday.
Dubai struggled to assuage 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. []
[]
"Traditionally, European banks are heavily exposed in the
Middle East. But how far U.S. banks are exposed is yet to be
made clear," Emori said.
Even if U.S. stocks follow other regions lower and fuel
fears about a credit crunch, investors would not sell gold as
heavily as at the time of the financial crisis a year ago,
Emori said.
"If and when other assets are sold and down, gold will
likely hold onto its shine given current low interest rates,
making it almost the same as cash," he said.
Spot gold <XAU=> was at $1,144.00 an ounce by 0827 GMT,
after briefly dropping 4.7 percent to $1,136.80/oz, compared to
New York's notional close of $1,192.60.
With the latest sell-off, gold is set to end the week flat
after Thursday's fresh record high of $1,194.90 before the
dollar gained ground on concern that debt problems in Dubai
could undermine the global financial system.
If gold ends flat or falls, it would snap a third straight
weekly gain.
"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.
"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.
Bullion has risen more than 30 percent this year, including
a rise of 12 percent 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 foreign currency reserves into 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 $1,172.50 per
ounce, down 1.2 percent from the previous close.
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 0757 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1143.85 -48.75 -4.09 29.96
Spot Silver 17.74 -0.87 -4.67 56.71
Spot Platinum 1420.50 -31.50 -2.17 52.41
Spot Palladium 354.50 -13.50 -3.67 92.14
TOCOM Gold 3204.00 -52.00 -1.60 24.52
610
TOCOM Platinum 3940.00 -61.00 -1.52 48.57
129
TOCOM Silver 495.00 -6.40 -1.28 55.03
13
TOCOM Palladium 1000.00 -11.00 -1.09 81.82
2
Euro/Dollar 1.4851
Dollar/Yen 86.18
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikako Mogi; Editing by Clarence
Fernandez)
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