* Gold strikes record, silver at 30-year peak
* Coming Up: U.S. Employment index Oct 1400 GMT
(Updates with comment, refreshes prices)
By Amanda Cooper
LONDON, Nov 8 (Reuters) - Gold dipped on Monday following
its largest two-day gain in a year at the end of last week, but
remained near record highs after the dollar rallied against the
euro and dented precious metals prices.
The gold price has risen by about 5 percent in the last five
trading days, driven by the drop in the U.S. currency after the
Federal Reserve last week detailed its plans to buy over half a
trillion dollars' worth of Treasuries to revive the economy.
Evidence of a cooling in investor interest in gold put the
price under some pressure this session, with holdings of gold in
the SPRD Gold Trust <GLD> down for an eighth session in a row
and a decline in speculative interest in New York futures.
Spot gold <XAU=> was last quoted at $1,390.90 an ounce at
1535 GMT, down from $1,394.50 in New York on Friday, when it
staged its biggest two-day gain since November last year, and
down from an all-time high of $1,398.35 earlier in the day.
U.S. December gold futures <GCZ0> were down $6.5 an ounce at
$1,391.30.
Comments from World Bank president Robert Zoellick in the
Financial Times calling for leading economies to consider
readopting a modified global gold standard to guide currency
movements did not have much impact on the price. []
"Gold could potentially play a small role in the overall
framework, but I don't think we are in a position to go back to
a gold standard," said commodities strategist Nic Brown of
Natixis.
"The world economy has moved too far from there and it would
need to be one that was built around a more inclusive range of
currencies," he said.
UNREALISTIC
Zoellick called for a system that "is likely to need to
involve the dollar, the euro, the yen, the pound and (yuan) that
moves towards internationalisation and then an open capital
account."
"I can imagine what he meant was asset inflation as measured
by the gold price should be an indicator that should be
considered by the central banks when they make their
interest-rate decisions," said LBBW analyst Thorsten Proettel.
The consensus among precious metals analysts was that the
gold market is also simply too small to absorb such demand.
"Unlike the World Bank, we do not believe that a form of the
gold standard will return. Very simply, there is not enough gold
supply in the world for the metal to perform in this role," said
Edel Tully, precious metals strategist at UBS.
"As Paul Donavon, from UBS Global Economics points out, any
reserve currency needs a supply that can grow as rapidly as
global trade. Gold supply falls significantly short of this
basic requirement."
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For the Q&A "Could world markets warm to a gold standard?"
please see []
For a Reuters Insider clip on the market's take on
Zoellick's comments, see http://link.reuters.com/pyv93q
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Outside of the policy arena, Ong Yi Ling, an investment
analyst with Phillip Futures in Singapore, said another key
trigger would be growth in ETF holdings to match price gains.
"What I would like to see would be the holdings in the ETF
side. I would like to see it increase to really show that this
rally in gold prices is sustainable," said Ong.
The SPDR Gold Trust <GLD.P> said its holdings slipped to
1,291.766 tonnes by Nov. 5 from 1,292.189 on Nov. 2. The
holdings hit a record at 1,320.436 tonnes on June 29. []
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For a factbox on how to invest in gold and price drivers,
click []
For gold's milestones on the road to record high, click
[]
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Higher gold prices attracted selling in Southeast Asia, but
premiums for gold bars were steady in Singapore as bargain
hunters resurfaced at lower levels. <GOLD/ASIA1>
The euro fell for a second day against the dollar, as
investors fretted about Ireland's debt problems and some of the
euro zone's other weaker links. The dollar index <.DXY> was last
up 0.7 percent. []
Silver <XAG=> hit a fresh 30-year peak at $26.98 an ounce
and was last at $26.72 an ounce, up 0.4 percent and near its
highest since March 1980, while platinum <XPT=> was down 0.6
percent at $1,755.00 an ounce, marking a second successive day
of declines and palladium <XPD=> was up 1.4 percent at $693.00,
up for a fourth day in a row.
(Additional reporting by Lewa Pardomuan in Singapore and
Siddesh Mayanker in Mumbai; Editing by William Hardy)
