* Gold off 1-month low, investors nervous
* Gold bar premiums in Hong Kong at $0.90-$1.70
* Coming Up: U.S. PPI inflation yy, NSA Feb; 1230 GMT
(Updates prices)
By Lewa Pardomuan
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 reversed gains.
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.
Workers were ordered to withdraw briefly from a stricken
Japanese nuclear power plant on Wednesday after radiation levels
surged, a development that suggested the crisis was spiralling
out of control.
Spot gold added $6.05 an ounce to $1,400 an ounce by
0657 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 steadied, having dropped to its lowest level
since late February on Tuesday.
Platinum failed to sustain an early rebound and
slipped to its weakest since December on worries the crisis in
Japan could affect demand in auto catalytic converters. Sister
metal palladium also gave up early gains.
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.
Asian financial markets rallied on Wednesday, with Tokyo
stocks rebounding 5.7 percent after a steep two-day sell-off on
Japan's killer earthquake and unfolding nuclear crisis.
U.S. gold futures for April rose $8.8 an ounce to
$1,401.6 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 edged lower on Wednesday, taking its cues from a
short-covering bounce in Tokyo shares, but may see more gains
near-term as jitters about Japan's nuclear crisis keep investors
on edge and risk appetites subdued.
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 rose $1 towards $110 after Bahraini security
forces attempted to clear protesters on Wednesday, rebounding
from a three-week low near $107 earlier in the day.
Precious metals prices 0657 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1400.00 6.05 +0.43 -1.37
Spot Silver 34.38 0.09 +0.26 11.41
Spot Platinum 1684.24 -15.76 -0.93 -4.71
Spot Palladium 702.47 -2.03 -0.29 -12.14
TOCOM Gold 3647.00 -85.00 -2.28 -2.20 93390
TOCOM Platinum 4406.00 -164.00 -3.59 -6.18 36498
TOCOM Silver 88.30 -3.80 -4.13 9.01 3191
TOCOM Palladium 1816.00 -86.00 -4.52 -13.40 1437
Euro/Dollar 1.3983
Dollar/Yen 80.95
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)
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