* Gold holds near last week's 18-month high
* Dealers wary of liquidation, support seen at $995
By Lewa Pardomuan
SINGAPORE, Sept 23 (Reuters) - Gold extended gains on
Wednesday, moving closer to an 18-month high struck last week,
after the U.S. dollar tumbled to its weakest in a year against
the euro, but worries about heavy liquidation persisted.
The rise has stoked fears of a repeat of last year's
selling, when bullion lost more than $100 only a few days after
it powered to a record $1,030.80 an ounce in March. Gold has
gone up as much as 16 percent this year.
Some investors were also reluctant to buy heavily before
the U.S. Federal Reserve announces the outcome of its two-day
meeting later in the day, although markets believe the Fed will
signal plans to maintain loose monetary policy well into 2010.
Spot gold <XAU=> hit an intraday high of $1,017.80 before
slipping to $1,013.95 an ounce by 0233 GMT, still steady from
New York's notional close and within striking distance of an
18-month high of $1,023.85 hit on Thursday.
"At these levels here, obviously they need a further
catalyst to get an upside. At the moment, the market will be
coy on the basis that we've got now record high long positions
on the CFTC," said Mark Pervan, senior commodities strategist
for ANZ.
"The market is quite concerned there could be some
unwinding of those positions. If they really unwound heavily, I
think we'll go back to $950 very quickly. I suspect there's a
pretty strong floor at $995," said Pervan, referring to this
week's 1-week low.
Noncommercial net long positions in gold futures in New
York at an all-time high of 235,647 lots for the week ended
Sept. 15 worried investors as it could spark a long
liquidation. []
The euro <EUR=> rose past resistance around $1.4825 to a
fresh one-year high of $1.4840 before it slipped to $1.4797,
erasing some of gold's gains. []
Against a basket of currencies, the dollar <.DXY> was down
0.16 percent at 75.995. The index has shed over 2.5 percent
this month as speculators dumped the dollar on rising
confidence in a global recovery and expectations that rates
will stay at rock-bottom levels there.
U.S. gold futures for December delivery <GCZ9> added $0.30
an ounce at $1,015.80 on the COMEX division of the New York
Mercantile Exchange, having hit a high of $1,020.4.
"We have to watch to the dollar because if it goes up
again, then it wil attract some selling in gold. We are also
watching the G20 meeting and its impact on the dollar," said a
dealer in Hong Kong. "But at the moment, I we don't even see
demand from the physical side," he said.
Leaders at a Group of 20 nations summit are expected to
call for stimulus to stay in place, a move which could give a
boost to riskier assets. []
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,101.735
tonnes as of Sept 22, unchanged from the previous day.
<XAUEXT-NYS-TT> []
Precious metals prices at 0233 GMT
Metal Last Change Pct chg Day ago pct MA 30
RSI Spot gold $1013.95 $0.15 +0.01% +13.04% $860.10
67
Spot silver $17.10 $0.00 +0.00% +42.74% $11.29
69
Spot plat $1334.00 $2.00 +0.15% +40.57% $948.98
66
COMEX gold $1014.50 $126.30 +14.22% +12.78% $857.64
67
Currencies
Euro/dlr $1.480 $0.167 +12.70% +12.35%
Dlr/yen 90.82 0.44 +0.49% +2.14%
(Editing by Sanjeev Miglani)
