* Gold shrugs off Friday's sharp loss, defies dollar rise
* Concerns over Ireland's debt levels linger, support gold
* Lonmin predicts platinum market deficit by 2012
* Coming up: Johnson Matthey platinum report due Tuesday
(Recasts, updates with comments and closing prices, changes
byline/dateline, previously LONDON)
By Frank Tang
NEW YORK, Nov 15 (Reuters) - Gold prices steadied on
Monday, after the biggest one-day fall in four months in the
previous session, as concerns over euro zone sovereign debt and
technical buying offset a stronger dollar.
The metal shrugged off a 3 percent drop on Friday as
worries about euro zone debt woes and weaker U.S. Treasuries
prices prompted underlying safe-haven buying. Silver fell about
1 percent but showed signs of steadying after a volatile week
last week.
"Gold is stabilizing from last week's significant sell-off
and liquidation plunge, and investors are just taking a pause
right now to determine the next direction," said Frank McGhee,
head precious metals trader of Integrated Brokerage Services.
"We had very little follow-through selling today, and the
market was well bid even in the face of the stronger dollar,"
McGhee said.
Technical buying also helped boost U.S. December gold
futures as prices found support and rebounded after briefly
dipping below their 20-day moving average, McGhee said. (Click
here for a technical column on spot gold: [])
Spot gold <XAU=> slipped 0.3 percent to $1,362.09 an ounce
at 3:18 p.m. EST (2018 GMT). U.S. gold futures for December
delivery <GCZ0> settled up $3 at $1,368.50.
The dollar rose to a six-week high on Monday as worries
about Ireland's ability to repay its debt, and concerns its
problems may spread throughout the euro zone, rekindled the
greenback's appeal as a safe haven.
"Beyond the short-term correction in the gold price, the
environment remains very positive for the metal," said
Anne-Laure Tremblay, an analyst at BNP Paribas.
"Demand for gold is broad-based and is unlikely to falter
next year, notably due to low interest rates, ample liquidity,
inflationary concerns (particularly in Asia), issues relating
to euro zone periphery countries and a weakening dollar,"
Tremblay said.
A spike in the borrowing costs of peripheral euro zone
members over recent weeks had raised concerns about their
ability to cut debt. []
German government bond prices fell on Monday, however, as
some safe-haven flows were unwound on talk that Ireland may ask
the European Union for aid to manage its debt crisis.
Ireland on Sunday did not rule out the possibility that it
might have to turn to Europe to deal with its debt but said
that no application had been made for assistance yet.
[]
Commerzbank analyst Eugen Weinberg said newly resurfacing
worries over the stability of certain euro zone economies were
"definitely helping" the metal and it explained why gold was
not trading much lower.
RISK AVERSION EYED
A stronger dollar typically weighs on gold, because it
dents interest in the metal as an alternative asset and makes
it more expensive for holders of other currencies.
However, when risk aversion rises sharply, as at the height
of the sovereign debt crisis in the second quarter, they can
move in the same direction as both serve as havens from risk.
This may happen again, if current euro zone debt fears worsen,
analysts said.
Falling U.S. government bond prices also prompted some
investors to buy gold as a safe haven.
Ten- and 30-year U.S. Treasury prices each fell a point on
Monday, expanding earlier losses as traders unwound positions
taken in advance of the Federal Reserve's second program of
long-term asset purchases, known as QE2 in market shorthand.
[]
Silver <XAG=> dropped 0.3 percent to $25.70 an ounce. It
underperformed gold on Friday to fall more than 6 percent, its
biggest one-day drop since early February.
Platinum <XPT=> fell 0.7 percent to $1,669.24 an ounce,
while palladium <XPD=> decreased 0.7 percent to $670.97.
The chief executive of Lonmin <LMI.L>, the world's
third-biggest platinum producer, said on Monday he sees the
platinum market moving into deficit by about 2012 as the auto
sector recovers further. []
PGM market is now awaiting a closely watched Platinum 2010
interim report by platinum refiner and specialist Johnson
Matthey Plc <JMAT.L>.
Prices at 3:34 p.m. EST (2034 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1368.50 3.00 0.2% 24.8%
US silver <SIZ0> 26.092 0.150 0.0% 54.9%
US platinum <PLF1> 1685.80 1.20 0.1% 14.6%
US palladium <PAZ0> 681.30 7.65 1.1% 66.6%
Gold <XAU=> 1360.16 -6.19 -0.5% 24.1%
Silver <XAG=> 25.54 -0.45 -1.7% 51.7%
Platinum <XPT=> 1665.50 -13.50 -0.8% 13.6%
Palladium <XPD=> 669.47 -6.03 -0.9% 65.1%
Gold Fix <XAUFIX=> 1368.50 1.50 0.1% 24.0%
Silver Fix <XAGFIX=> 26.01 -78.00 -2.9% 53.1%
Platinum Fix <XPTFIX=> 1675.00 0.00 0.0% 14.3%
Palladium Fix <XPDFIX=> 675.00 4.00 0.6% 67.9%
(Additional reporting by Jan Harvey in London; Editing by
Walter Bagley)
