(Updates prices)
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=> hit a high of $881.30 an ounce with the help of
purchases from speculators in Japan before dipping to
$875.70/876.70 an ounce. This was still higher than
$864.65/866.05 late in New York and was off a three-month low
of $862.30 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 remain fairly changeable in the next couple of
months. In that situation, we're likely to see the U.S. dollar
remain vulnerable."
The dollar dipped to 103.70 yen <JPY=>, while the euro
edged up to $1.5635 <EUR=>, off a one-month low of $1.5517
marked on Wednesday. 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 $13.0 an ounce to
$878.1 an ounce.
Spot platinum <XPT=> rose to $1,922.50/1,942.50 an ounce
from $1,906/1,921 late in New York.
Most active Tokyo April 2009 platinum futures <0#JPL:>
added 46 yen per gram to 6,276 yen, having hit a high of 6,318
yen.
Silver <XAG=> rose to $16.93/17.00 an ounce from
$16.60/16.65 an ounce. Spot palladium <XPD=> jumped to
$417.50/425.50 an ounce from $410.50/418.50 late in New York.
Precious metals prices at 0604 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 876.10 2.60 +0.30 5.21
Spot Silver 16.93 0.08 +0.47 14.62
Spot Platinum 1922.50 5.00 +0.26 26.48
Spot Palladium 417.50 0.00 +0.00 13.45
TOCOM Gold 2950.00 23.00 +0.79 -3.59
39064
TOCOM Platinum 6270.00 40.00 +0.64 17.44
15085
TOCOM Silver 571.40 15.90 +2.86 5.62
827
TOCOM Palladium 1429.00 -8.00 -0.56 5.77
1545
Euro/Dollar 1.5629
Dollar/Yen 103.78
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
