(Updates prices, adds quotes, premiums)
By Lewa Pardomuan
SINGAPORE, April 28 (Reuters) - Gold rose on Monday after
oil powered to another record high above $119 a barrel, but
investors may be careful about taking large position ahead of
this week's meeting on interest rates by the Federal Reserve.
Gold has lost more than 13 percent in value since spiking
to a lifetime high of $1,030.80 an ounce on March 17. It has
been struggling to regain $900 and hit a three-week low of
$877.60 on Friday before rebounding after oil struck an
all-time peak high.
Gold <XAU=> rose to $892.80/893.80 an ounce from
$886.90/888.30 an ounce late in New York on Friday, as surging
oil prices boosted the metal's appeal as a hedge against
inflation and helped it defy a firming dollar.
"I think the key for gold would be how it shapes up after
the FOMC meeting," said David Moore, an analyst at Commonwealth
Bank of Australia in Sydney.
"I think at the moment, our expectations is the Fed will
cut rate by 25 basis points. How the U.S. dollar reacts to the
Fed's rates decision, I think, will be a key to the near-term
direction of gold," he said.
The policy-setting Federal Open Market Committee will
announce its decision around 2:15 p.m. EDT (1815 GMT) on
Wednesday.
Gold has gained on speculative buying spurred by record
high oil prices and expectations of more rate cuts in the
United States, which reduces the dollar's appeal and makes gold
more appealing for investors seeking an alternative investment.
Oil struck a record high at $119.93 a barrel on Monday
after a strike closed a major British oil pipeline and as new
violence in Nigeria reignited supply fears. []
"There's short-covering after the market dropped a lot on
Friday. There's some physical buying but I think people had
bought a lot last week," said a dealer in Hong Kong, referring
to jewellery makers.
"I think people are just watching movements in the dollar.
If the dollar continues to strengthen, there's a possibility
gold will go down $875."
Premiums for gold bars were steady at 20 U.S. cents to the
spot London prices in Hong Kong <GOLD/ASIA1>.
The dollar rose as high as 104.83 yen <JPY=> on trading
platform EBS, the highest since late February, on growing
expectations the Fed may stop cutting interest rates before
the
policy meeting.
Spot platinum <XPT=> rose to $1,962.50/1,972.50 an ounce
from $1,944/1,964 late in New York. It had fallen to $1,907 an
ounce on Friday, its lowest since early April.
The new benchmark contract in Tokyo platinum futures
<0#JPL:>, April 2009, jumped nearly 3 percent to end the
morning session 176 yen per gram higher at 6,461 yen, driven by
a weaker Japanese currency.
Silver <XAG=> rose to $16.94/17.00 an ounce from
$16.83/16.89 an ounce. Spot palladium <XPD=> fell slightly to
$435/443 an ounce from $435.50/443.50 an ounce.
Precious metals prices at 0233 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 892.50 7.35 +0.83 7.18
Spot Silver 16.94 0.12 +0.71 14.69
Spot Platinum 1962.50 15.50 +0.80 29.11
Spot Palladium 435.00 -2.50 -0.57 18.21
TOCOM Gold 3032.00 39.00 +1.30 -0.92
17157
TOCOM Platinum 6461.00 176.00 +2.80 21.02
12339
TOCOM Silver 577.60 16.70 +2.98 6.77
502
TOCOM Palladium 1505.00 26.00 +1.76 11.40
743
Euro/Dollar 1.5633
Dollar/Yen 104.69
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
