* Gold off 1-month low, investors nervous
* Coming Up: U.S. PPI inflation yy, NSA Feb; 1230 GMT
(Updates prices, adds quotes)
SINGAPORE, March 16 (Reuters) - Gold regained strength on
Wednesday after falling to a 1-month low in the previous
session, but declines in ETF holdings to their lowest in 10
months suggested that speculators could still sell bullion to
raise liquidity if equities extend losses.
Investors closely watched a nuclear crisis in Japan
triggered by a deadly earthquake on Friday, but the physical
market slowed to a trickle after bargain hunting resurfaced at
lower levels, putting pressure on premiums.
Another fire broke out on Wednesday at an
earthquake-crippled Japanese nuclear plant that has sent low
levels of radiation wafting into Tokyo and triggered
international alarm, suggesting the crisis may be slipping out
of control.
Spot gold added $2.75 an ounce to $1,396.70 an ounce
by 0031 GMT, having fallen as low as $1,380.90 an ounce on
Tuesday, its weakest since mid-February. Gold was trading below
the 25-day moving average around $1,403.
"I think sentiment is a bit mixed now. We don't know yet how
the nuclear crisis will affect the world. Everything seems to
stop in Japan, so the economy will deteriorate. We don't know
whether if will affect other areas," said Ronald Leung, director
of Lee Cheong Gold Dealers in Hong Kong.
"We heard there was some physical buying at about $1,390,"
said Leung, adding that jewellers had deserted the physical
market at current price levels.
Premiums for gold bars in Hong Kong were offered from as
little as 90 cents to the spot London prices to as high as
$1.70, reflecting an illiquid market.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust , said its holdings fell further to 1,212.745
tonnes by March 15, their lowest since May of last year, from
1,213.655 tonnes on March 14.
Silver ticked down, having dropped to its lowest
level since late February on Tuesday. Platinum and
palladium failed to sustain an early rebound on worries
the crisis in Japan could affect demand for the metals, which
are mainly used in auto catalytic converters.
Japan's major car plants were shut following Friday's
devastating earthquake, in which officials say at least 10,000
people were killed, and remain closed as power supplies are
disrupted and companies struggle to gather information amid the
chaotic situation in the country.
Japan's Nikkei average rallied 4.4 percent on Wednesday
after the worst two-day sell-off since the 1987 crash, with some
investors scooping up shares even as many fretted that a further
deterioration in nuclear crisis could undermine the market.
U.S. gold futures for April rose $4.5 an ounce to
$1,397.3 an ounce.
Premiums for gold bars were unchanged at $1 an ounce to the
spot London prices in Singapore, a centre for bullion trading in
Southeast Asia.
"I guess supplies are still limited and many people do not
want to take delivery if the destinations are far away. They
fear the price will bounce back further," said a dealer in
Singapore.
"It's a very tricky situation. Last night, we even saw buy
orders at $1,380, so everyone just trembles when there's the
slightest ripple in the market."
The yen stood within a whisker of a record high against the
dollar on Wednesday, while the Swiss franc held at all-time
highs as jitters about Japan's nuclear crisis kept investors on
edge.
Since the massive earthquake and tsunami hit Japan, the yen
has risen partly on expectations Japanese insurers and companies
will repatriate funds to help pay claims and reconstruction
costs. But fears of intervention by Japanese authorities to
weaken the yen has limited its upside so far.
Brent crude fell more than $1 on Wednesday to a three-week
low near $107 as pessimism about Japan's nuclear crisis offset
concern about Middle East unrest after Bahrain declared martial
law.
Precious metals prices 0331 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1396.70 2.75 +0.20 -1.60
Spot Silver 34.06 -0.23 -0.67 10.37
Spot Platinum 1679.99 -20.01 -1.18 -4.95
Spot Palladium 702.47 -2.03 -0.29 -12.14
TOCOM Gold 3635.00 -97.00 -2.60 -2.52 77630
TOCOM Platinum 4383.00 -187.00 -4.09 -6.67 26174
TOCOM Silver 87.50 -4.60 -4.99 8.02 2712
TOCOM Palladium 1832.00 -70.00 -3.68 -12.64 1251
Euro/Dollar 1.3965
Dollar/Yen 80.77
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Jo Winterbottom)
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