* Gold eases after earlier buying on Gaza offensive
* Gold fails to top 12-week high marked last week
* Supported by higher oil amid geopolitical tensions
By Risa Maeda
TOKYO, Jan 5 (Reuters) - Gold erased earlier gains to fall
slightly on Monday as safe-haven buying in the wake of Israel's
weekend ground offensive in the Gaza Strip petered out.
Spot gold <XAU=> touched a high of $883.55 an ounce at one
stage, but failed to top the 12-week peak of $889.55 marked last
Monday when oil rallied on fears that Israeli air attacks on
Hamas could disrupt oil supplies.
As of 0247 GMT, cash gold stood at $869.55 per ounce, down
0.4 percent from New York's notional close of $873.20.
Similarly, COMEX gold futures <GCG9> erased gains and fell 1
percent to $869.2 per ounce in after-hours trading.
On Friday, gold futures for February delivery had settled
down $4.80 at $879.50 on the COMEX division of the New York
Mercantile Exchange.
But prices were supported by higher oil and solid physical
demand for the yellow metal. Given the flood of liquidity being
provided by central banks to help resuscitate the global economy,
the metal is luring investors seeking an alternative asset,
analysts said.
"It only takes a tiny inflow of liquidity in the markets to
make gold shine," said Yuki Sonoda, adviser at Tokyo-based
Daiichi Commodities Co.
Gold could resume its rally as investor risk appetite will
likely stay high given hopes of a fresh economic stimulus package
from U.S. President-elect Barack Obama, supporting company shares
as well as gold, Sonoda said.
"Strong expectations for Obama will keep supporting company
shares as well as gold at least until he takes office on Jan.
20," he said.
Oil prices rose for a third day on Monday after Israel's
ground offensive into Gaza and on concerns over a deepening
Russian gas supply row. []
The Saturday night invasion of the Hamas-ruled Gaza Strip
followed a week of Israeli bombardments from land, sea and air --
the most serious Israeli-Palestinian fighting in decades.
[]
U.S. crude oil prices <CLG9> had jumped more than 4 percent
before trading up 1.7 percent at $47.14 per barrel.
Cash platinum <XPT=> briefly rose as high as $951.00 per
ounce, the highest since Oct. 16, before profit-taking set in.
Platinum fell 1.3 percent to $931.00, compared with $944.00
in New York. Palladium <XPD=> fell 0.5 percent to $189 an ounce,
but silver <XAG=> was almost flat at $11.50 an ounce from $11.52.
Gold futures on the Tokyo Commodity Exchange <0#JAU:> started
2009 on a positive note, helped by gains in the dollar versus the
yen. The Tokyo market had been closed since Dec. 31 for the New
Year's holiday.
The benchmark TOCOM December contract ended the half-day
session up 21 yen per gram at 2,594 yen. It earlier rose as high
as 2,624 yen, the highest for any benchmark since Oct. 21.
Full-day trading resumes on Tuesday.
Precious metals prices at 0308 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 867.20 -6.00 -0.69 -1.47
Spot Silver 11.51 -0.01 -0.09 1.68
Spot Platinum 931.00 -13.00 -1.38 -0.11
Spot Palladium 189.00 -1.00 -0.53 2.44
TOCOM Gold 2594.00 21.00 +0.82 0.82 21117
TOCOM Platinum 2766.00 114.00 +4.30 4.30 7917
TOCOM Silver 338.40 19.10 +5.98 5.98 542
TOCOM Palladium 578.00 28.00 +5.09 5.09 746
Euro/Dollar 1.3857
Dollar/Yen 91.96
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Editing by Chris Gallagher)
