* Gold rises on euro, but off record
* For the technicals on gold, click []
* Coming Up: U.S. Existing home sales May; 1400 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, June 22 (Reuters) - Gold gained on Tuesday after
China's central bank raised the yuan's mid-point, spurring
early buying in the euro that encouraged bargain hunting after
bullion dropped sharply from a record high the previous day.
Gold could still revisit $1,250 an ounce due to worries
about the global economy, but an increase in risk appetite
following China's move could cap gains. Silver and platinum
group metals were higher, partly driven by firm base metals.
[]
China's central bank set the yuan's daily mid-point
<CNY=SAEC> at 6.7980 against the dollar on Tuesday, the highest
level since a revaluation in July 2005. []
Gold <XAU=> rose as high as $1,240.20 before paring some of
the gains as the euro lost strength. It stood at $1,237.70 by
0535 GMT, still $6.05 higher than New York's notional close on
Monday, when it hit a record high of $1,264.90.
For a graphic of the gold technical outlook, click:
http://graphics.thomsonreuters.com/gfx/WT_20102206100825.jpg
"There's some physical buying from the retail sector but I
think there's not much. The market is consolidating after
reaching record highs," said a dealer in Hong Kong.
"This is also a good time to take profits but I don't think
gold will fall below $1,200. We may trade in a range of $1,230
to $1,248 ahead of the FOMC meeting. If goes back to around
$1,250, we may see another record high next week," he added.
The Federal Reserve's two-day policy meeting begins on
Tuesday and some dealers are increasingly convinced the U.S.
central bank will leave its policy rate target in the zero to
0.25 percent range until the middle of 2011.
U.S. gold futures for August delivery <GCQ0> fell $1.5 an
ounce to $1,239.2, after hitting a record of $1,266.50.
Gold has rallied to successive records as investors turned
to the metal on worries the euro debt crisis would spread, the
U.S. economy may be slowing and after China's move to make the
yuan exchange rate flexible put pressure on the dollar.
A Reuters poll of analysts showed Chinese authorities will
only allow up to a 2.4 percent rise for the yuan against the
dollar by the end of 2010, keeping its word that it will keep
the currency basically stable. []
"In the short-term the gold price may be in for some
consolidation," said Fortis Bank Nederland in a report.
"But rather like a long-distance runner who has been
sitting in an armchair for years, the gold price needs to pause
for breath before the next small rally higher."
Oil fell 0.8 percent toward $77 on Tuesday on speculation
that a gradual appreciation of the yuan would have a limited
impact on China's petroleum imports in the short term. []
Precious metals prices at 0535 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1237.70 6.05 +0.49 12.96
Spot Silver 18.79 0.09 +0.48 11.65
Spot Platinum 1591.00 4.00 +0.25 8.45
Spot Palladium 488.00 -2.00 -0.41 20.35
TOCOM Gold 3628.00 -61.00 -1.65 11.32
55151
TOCOM Platinum 4691.00 -14.00 -0.30 7.08
11519
TOCOM Silver 55.50 -1.50 -2.63 7.35
660
TOCOM Palladium 1446.00 -7.00 -0.48 24.12
275
Euro/Dollar 1.2306
Dollar/Yen 90.89
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
