* Flight to safety boosts gold after S&P downgrades Spain
* Gold hits records in euros, sterling, Swiss francs
* Charts suggest move upward, test of $1,240/oz
* Coming up: U.S. first-quarter GDP data on Friday
(Recasts, adds comments, closing prices, changes byline,
dateline, previously LONDON)
By Frank Tang
NEW YORK, April 28 (Reuters) - Gold futures rose on
Wednesday, hitting a 2010 peak after Standard & Poor's
downgraded Spain's debt, but safe-haven buying fizzled as other
global markets strengthened, pulling the precious metal off
session highs.
Analysts said fears about sovereign credit default subsided
after the Federal Reserve offered a more upbeat view of the
U.S. economy, left interest rates near zero and promised to
keep them low for an extended period. []
Bruce Dunn, vice president of trading at New Jersey-based
Auramet Trading, said gold came off session highs on improving
economic sentiment due to a better equities market and the
Fed's policy statement.
Earlier, S&P cut its ratings on Spain one notch to AA from
AA-plus, citing a more protracted period of sluggish growth
than previously expected. []
"Gold has clearly become the safe haven as people don't
know where to put their money anymore. The metal is not based
on currencies anymore, but rather which country is going to be
the next downgrade," Dunn said.
During the session, gold hit record highs when priced in
euros, sterling, Swiss francs. It rose to its highest level in
yen terms since 1983. []
Spot gold <XAU=> rose to a high of $1,174.18, the loftiest
level since Dec. 4. It was at $1,166.65 an ounce at 3:54 p.m.
EDT (1954 GMT), against $1,168.03 late in New York on Tuesday.
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the NYMEX settled up $9.60 at $1,171.80 an ounce.
A day earlier, S&P cut its ratings on Greece to junk status
and also slashed Portugal's.
"This kind of nervousness should be supportive for gold,"
said Societe General analyst David Wilson. "It is exactly the
sort of environment gold thrives in. It has come back to being
that safe haven that we saw at the beginning of last year."
The euro fell to a one-year low at about $1.32 <EUR=>.
Concern over smaller euro zone economies has boosted gold
but pressured the euro this year, weakening the traditional
relationship between the two.
OTHER METALS UNDER PRESSURE
Gold's nearly 7 percent gains this year have come largely
on the back of rising sovereign risk, analysts said.
On technical charts, a reverse head-and-shoulder pattern in
gold signals the metal's next move should be a test upward to a
record high at $1,240 an ounce, analysts said. []
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing the metal's technical outlook, see:
http://link.reuters.com/kad89j
For an interactive graphic showing the relative performance
of various commodities in 2010, click on:
http://graphics.thomsonreuters.com/10/CMD_PRFG0410.swf
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Other precious metals such as silver, platinum and
palladium, which are more industrial in use than gold,
succumbed to selling pressure, however.
Platinum <XPT=> hit its lowest in a week on Wednesday at
$1,695 an ounce. It was last at $1,705.50 an ounce against
$1,715.50 late on Tuesday.
Palladium <XPD=> was at $537 an ounce against $545.50,
while silver <XAG=> was at $18.07 against $18.14.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1171.80 9.6 0.8 1096.20 6.9
US silver <SIK0> 18.107 -0.012 -0.1 16.845 7.5
US platinum <PLN0> 1713.60 -7.30 -0.4 1471.00 16.5
US palladium <PAM0> 541.90 -7.05 -1.3 408.85 32.5
Prices at 3:29 p.m. EDT (1929 GMT)
Gold <XAU=> 1168.40 0.37 0.0 1096.35 6.6
Silver <XAG=> 18.09 -0.05 -0.3 16.84 7.4
Platinum <XPT=> 1706.50 -9.00 -0.5 1465.50 16.4
Palladium <XPD=> 537.50 -8.000 -1.5 405.50 32.6
Gold Fix <XAUFIX=> 1161.00 -3.25 -0.3 1104 5.2
Silver Fix <XAGFIX=> 17.96 -20.00 -1.1 16.99 5.7
Platinum Fix <XPTFIX=> 1714.00 1.00 0.1 1466 16.9
Palladium Fix<XPDFIX=> 543.00 8.00 1.5 402 35.1
(Additional reporting by Chris Kelly in New York, Jan Harvey
in London; Editing by David Gregorio)
