* Futures liquidation, profit-taking pressure market
* Euro zone fiscal woes could underpin gold prices
* U.S. platinum, palladium funds show inflow
(Recasts, updates comments, market activity, adds NEW YORK
to dateline, second byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 10 (Reuters) - Gold hit its lowest
in nearly two weeks on Wednesday, falling toward $1,100 an
ounce on heavy futures liquidation and as safe-haven buying on
Greek sovereign debt worries subsided.
After rising almost $20 last week, gold has already dropped
by $27 so far this week as traders take profits. Speculators
had been increasing their net long position in gold for four
straight week but they may now be trimming those positions,
putting selling pressure on the yellow metal, traders said.
The latest Commitment of Traders report by the U.S.
Commodity Futures Trading Commission showed net long
noncommercial gold futures positions at 207,372 contracts, up
3.4 percent from the prior week and up 14 percent during the
last four week.
"We saw some liquidation on futures again, with more than 1
million ounces being sold," said Christophe Jacot, vice
president of FX and precious metals at EFG Bank.
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Spot gold <XAU=> hit a low of $1,102.85, the weakest since
Feb. 25. It was at $1,108.45 an ounce at 12:57 p.m. EST (1757
GMT), against $1,121.15 late in New York on Tuesday.
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the NYMEX were down $14.30 at $1,108 an ounce in
heavy trade.
Gold weakend despite a stronger euro <EUR=>, after Greece
said in a report it is ahead of schedule with plans to tame its
budget deficit, and there has been no slippage in moves to rein
in spending. []
However, persistent worry over the euro zone's fiscal
health could still lent support, analysts said.
"It looks like there is still some safe-haven money (coming
in)," said Deutsche Bank trader Michael Blumenroth.
Fitch Ratings said on Tuesday it still has a negative
outlook on Portugal's credit rating, which heightened concern
that peripheral euro zone economies may face debt problems
similar to those of Greece. []
"All the worries about the fiscal situation, and how that
is managed, are being read as positive for gold," said Credit
Agricole analyst Robin Bhar.
"That should become a long-standing issue, as people are
concerned about how governments in the euro zone are handling
the whole fiscal situation."
PLATINUM TURNS LOWER
Platinum turned lower on broad-based metal weakness. The
metal had risen more than 1 percent to its highest in seven
weeks earlier in the session, boosted by strong buying from
Japan in Asian trade.
"Owing to their industrial use, silver, platinum and
palladium experienced disproportionally high gains on the back
of the general metal price rally," said Commerzbank in a note.
Both platinum and palladium are benefiting from
expectations that demand from industrial users, chiefly
carmakers, will rise.
They are also being underpinned by rising investment demand
after the launch of platinum- and palladium-backed
exchange-traded products in New York earlier this year by a
U.S. subsidiary of London's ETF Securities.
Both products saw inflows on Tuesday. Holdings of ETFS
Physical Platinum Shares <PPLT.P> rose nearly 10,000 ounces to
289,610 ounces, while those of ETFS Physical Palladium Shares
<PALL.P> climbed nearly 15,000 ounces to 504,511 ounces.
Platinum <XPT=> was at $1,584.50 an ounce against $1,589,
while palladium <XPD=> was at $458.50 against $465. Spot silver
<XAG=> was at $16.97 an ounce against $17.23.
Prices at 1:11 p.m. EST (1811 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCJ0> 1106.20 -16.10 -1.4 1096.20 0.9
US silver <SIK0> 17.015 -0.323 -1.9 16.845 1.0
US platinum <PLJ0> 1588.50 -8.40 -0.5 1471 8.0
US palladium <PAM0> 463.70 -5.60 -1.2 408.85 13.4
Gold <XAU=> 1105.45 -15.70 -1.4 1096.35 0.8
Silver <XAG=> 16.98 -0.25 -1.5 16.84 0.8
Platinum <XPT=> 1584.50 -4.50 -0.3 1465.50 8.1
Palladium <XPD=> 460.00 -5.00 -1.1 405.50 13.4
Gold Fix <XAUFIX=> 1120.50 -4.00 -0.4 1104 1.5
Silver Fix <XAGFIX=> 17.47 42.00 2.5 16.99 2.8
Platinum Fix <XPTFIX=> 1605.00 9.00 0.6 1466 9.5
Palladium Fix <XPDFIX=> 471.00 2.00 0.4 402 17.2
(Reporting by Frank Tan and Jan Harvey; Editing by Lisa
Shumaker)
