* Gold extends fall as equities hold firm
* SPDR holdings edge down 0.31 tonnes from record high
(Updates prices, adds Bernanke testimony)
By Rebekah Curtis
LONDON, March 24 (Reuters) - Gold slipped about 2 percent on
Tuesday as the dollar strengthened after a U.S. plan helped
boost economic sentiment, but analysts said inflationary
concerns would underpin bullion's safe-haven appeal.
Gold <XAU=> was at $922.60/923.80 an ounce at 1615 GMT, down
from $937.15 late in New York on Monday, when it fell more than
1 percent as investors moved away from safe-haven investments.
The precious metal touched a day's low of 916.65.
The dollar rose against both the yen and the euro as
investors concluded a U.S. plan to remove bad loans from banks'
balance sheets would do a lot to help the U.S. economy recover
sooner than others. [] []
Gold is often viewed as an alternative to holding the
dollar, and often falls when the dollar rises because it makes
metals priced in the U.S. currency more expensive for holders of
other currencies.
"The packages that are currently being implemented in the
United States have leant the dollar some strength," said BNP
Paribas analyst Michael Widmer. "And at the same time
(investors) become a bit less bullish on gold."
European and U.S. stocks traded lower, though world stocks
hit five-week highs earlier on Tuesday as investors pocketed
riskier assets on growing optimism about the U.S. plan. []
[] []
The U.S. plan earlier helped spur Japan's Nikkei average
<> to a 2-1/2 month closing high on Tuesday. []
"Sentiment (on gold) is a bit weaker off a perceived
improvement in other forms of asset classes," said Michael
Khosrowpour, an analyst at Triland Metals, pointing to overnight
gains in stock markets and gains in the dollar.
TESTIMONIES
U.S. Treasury Secretary Timothy Geithner on Tuesday joined
the Federal Reserve in calling for authority to wind down
failing non-bank financial firms that threaten the financial
system. []
Analysts said fears of inflation fanned by the Federal
Reserve's plans to buy long-dated U.S. Treasuries still lingered
even if they had eased a little.
"Gold will probably continue to follow inflation
expectations in the near term although it remains vulnerable to
improved risk asset sentiment," UBS said in a note.
Bullion has recovered ground from a six-week low of $882.90
marked on March 18 but still has some way to go before
approaching the 11-month high above $1,000 reached in February.
It soared to an all-time peak of $1,030.80 in March 2008.
Receding interest in gold was also evident in the holdings
of gold-backed exchange traded funds.
The world's largest gold-backed ETF, the SPDR Gold Trust
<GLD>, said its holdings nudged down about a third of a tonne to
1,114.29 tonnes on March 23 from a record high 1,114.60 tonnes.
[]
For details on gold holdings of the ETF listed in New York
and co-listed on other exchanges, please see:
http://www.exchangetradedgold.com/iframes/usa.php
For a graphic, please see:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD240309.jpg
Silver <XAG=> was at $13.31/13.37 from $13.63, having
touched a day's low of $13.26. Platinum <XPT=> was at
$1,109.5/1,119.5 from $1,121 after hitting a day's low of
$1,102.5, and palladium <XPD=> was at $203.5/208.5 versus
$207.5, having touched a day's low of $202.
"It reflects the underlying woes in the auto industry,"
Standard Bank analyst Leon Westgate said of falls in platinum.
"Whereas gold benefits from its safe haven status, that
doesn't spill over so much to metals such as platinum and
palladium which are more closely tied to industrial end uses."
(Additional reporting by Pratima Desai; editing by Anthony
Barker)
