(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, May 1 (Reuters) - Gold jumped almost 2 percent
on Thursday on a softer dollar, regaining its appeal as an
alternative investment after the U.S. Federal Reserve trimmed
interest rates but left the outlook for more cuts unclear.
Gold <XAU=> rose to $881.10/882.10 an ounce from
$864.65/866.05 an ounce late in New York with the help of
purchases from speculators in Japan -- off a three-month low of
$862.30 an ounce hit on Wednesday.
"There's some follow-through buying from the Japanese once
the market opened. Right now, we'll meet some resistance around
the $882 and $885 levels," said Louis Lok, a dealer at Bank of
China in Hong Kong.
"But technically, I would say the market is not yet out of
the bearish sentiment. We need to break $890 and stand above
this level," said Lok, who pegged support around $872.
Gold hit a record $1,030.80 an ounce on March 17 but has
struggled since then as investors booked profits.
Overall trading was slow due to holidays in much of Asia
including China and Southeast Asia.
Investors struggled to interpret the decision by the Fed,
which cut interest rates by 25 basis points on Wednesday but
did not deliver an unequivocal statement that the worst was
over for the economy.
In theory, lower rates boost gold's appeal as an
alternative investment to stocks and bonds.
Dealers expected volatile days ahead after a drop in gold
exchange-traded funds holdings in the world's largest ETF,
StreetTRACKS Gold Shares <XAUEXT-NYS-TT>, suggested investors
interest was declining.
"The outlook, I think, still depends very much on what
happens with the U.S. dollar. We could be in for a pretty
volatile period over the next couple of months," said David
Moore, an analyst with Commonwealth Bank of Australia in
Sydney.
"I can sort of see a situation where perceptions of the
U.S. economy remains fairly changeable in the next couple of
months. In that situation, we're likely to see the U.S. dollar
remain vulnerable."
The dollar inched down to 103.80 yen <JPY=>, while the euro
edged up to $1.5637 <EUR=>. Investors are awaiting U.S. jobs
data on Friday for further clues on the health of the economy
and the direction of the dollar.
Gold futures for June delivery <GCM8> on the COMEX division
of the New York Mercantile Exchange rose $16.9 an ounce to
$882.0 an ounce.
Spot platinum <XPT=> rose to $1,935/1,955 an ounce from
$1,906/1,921 late in New York.
Most active Tokyo April platinum futures <0#JPL:> ended the
morning session 65 yen per gram higher at 6,295 yen.
Silver <XAG=> rose to $16.94/17.00 an ounce from
$16.60/16.65 an ounce. Spot palladium <XPD=> rose to
$417.50/425.50 an ounce from $410.50/418.50 late in New York.
Precious metals prices at 0215 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 878.95 5.45 +0.62 5.55
Spot Silver 16.95 0.10 +0.59 14.76
Spot Platinum 1935.00 17.50 +0.91 27.30
Spot Palladium 417.50 0.00 +0.00 13.45
TOCOM Gold 2965.00 38.00 +1.30 -3.10
23987
TOCOM Platinum 6295.00 65.00 +1.04 17.91
9493
TOCOM Silver 572.40 16.90 +3.04 5.80
658
TOCOM Palladium 1435.00 -2.00 -0.14 6.22
821
Euro/Dollar 1.5638
Dollar/Yen 103.69
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Kim Coghill)
