* Gold rise limited despite dollar weakness vs euro
* Euro zone finance ministers strike deal on Greece
* Goldman cuts gold forecasts but still bullish
* Coming up: U.S. consumer prices due on Tuesday
(Recasts, updates prices, market activity to close; new
byline, changes dateline, previously LONDON)
By Frank Tang
NEW YORK, April 12 (Reuters) - Gold finished flat on
Monday, retreating from a four-month high despite a euro rally
against the dollar, as weaker physical demand for the precious
metal limited gains.
Bullion's failure to rise further in spite of Wall Street's
gains and a sharply lower dollar indicated that the negative
correlation between the metal and the U.S. currency has
lessened.
Miguel Perez-Santalla, vice president of sales at Heraeus
Precious Metals Management, said gold prices, which have been
supported by investment demand, looked "toppish."
"We could be due for a short term correction right now, as
actual physical consumption is way off. Even though people are
talking about the economy doing so much better, we are not
seeing it here."
Spot gold <XAU=> was at $1,158.50 an ounce at 1:54 p.m. EDT
(1754 GMT), against $1,159.00 late in New York on Friday.
The metal hit a four-month peak at $1,168.70 an ounce
during the session, but eased as the euro retreated from highs
amid fears its rise may have been overdone.
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the NYMEX settled at $1,162.20 an ounce, up 30
cents.
The euro had climbed to a one-month high against the dollar
during the session, as euro zone finance ministers agreed on a
30 billion euro ($40.5 billion) rescue package for Greece.
Bullion was pressured by lingering uncertainties about
sovereign credit, especially in smaller euro zone economies,
and doubts that Greece's fiscal situation will improve.
"In the futures market at least there is some doubt over
how far this rally can extend," said Standard Bank analyst
Walter de Wet. "Looking at what is happening in the options
market, people at least for now seem unwilling to buy upside."
Spot gold typically benefits from dollar weakness, which
lifts gold's appeal as an alternative investment and makes
dollar-priced assets cheaper for holders of other currencies.
"The announcement of a deal reached to aid Greece over the
weekend will likely support risk appetite in the short term,
which means that the USD may come under pressure and the EUR
rebound," said BNP Paribas analyst Anne-Laure Tremblay.
"Though the short-term correlation between gold and the
EURUSD has lessened since January, it remains a significant
factor in shaping the gold price. Hence a short term rebound in
EURUSD will be bullish for gold over the next days."
GOLD HOLDING HITS RECORD
Investment interest in gold was strong, with holdings of
the world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust <GLD>, rising to a record 1,141.041
tonnes on Friday. []
Data from the Commodity Futures Trading Commission's
Commitment of Traders report (COTR) on Friday also showed a
sharp rise in net long positions, or commitments to buy, in the
week to April 6. []
"The latest COTR figures... show how widespread the return
of investor and speculative interest to the gold market has
been," said UBS analyst Edel Tully in a note.
Goldman Sachs meanwhile cut its 2010 gold forecast on
Monday, citing a rise in real interest rates, but said it still
sees the metal at record highs next year. []
Industrial precious metals platinum and palladium rose,
with platinum <XPT=> hitting its highest since August 2008 at
$1,736.50 an ounce and was last at $1,728 an ounce versus
$1,712. Palladium <XPD=> peaking at a two-year high of $522.50,
and was later at $518 against $510.
Silver <XAG=> hit its highest since Jan. 20 at $18.58 and
was last at $18.29 an ounce against $18.35.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1162.20 0.3 0.0 1096.20 6.0
US silver <SIK0> 18.414 0.063 0.3 16.845 9.3
US platinum <PLN0> 1739.40 12.00 0.7 1471.00 18.2
US palladium <PAM0> 524.15 10.55 2.1 408.85 28.2
Prices at 2:14 p.m. EDT (1814 GMT)
Gold <XAU=> 1155.75 -3.25 -0.3 1096.35 5.4
Silver <XAG=> 18.21 -0.14 -0.8 16.84 8.1
Platinum <XPT=> 1724.00 12.00 0.7 1465.50 17.6
Palladium <XPD=> 516.00 6.000 1.2 405.50 27.3
Gold Fix <XAUFIX=> 1158.75 -4.75 -0.4 1104 5.0
Silver Fix <XAGFIX=> 18.49 15.00 0.8 16.99 8.8
Platinum Fix <XPTFIX=> 1728.00 3.00 0.2 1466 17.9
Palladium Fix<XPDFIX=> 515.00 0.00 0.0 402 28.1
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
