* Gold falls late when Fed minutes show economic gloom
* Tame inflation outlook seen unwinding gold hedges
* Gold stays in range as risk appetites seesaws
(Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
By Carole Vaporean
NEW YORK, April 8 (Reuters) - Gold fell in late trade,
coming off firm closing levels after the Federal Reserve
released minutes of its last policy-setting meeting depicting
more economic gloom but little worry about inflation.
Still, prices held within recent ranges. Analysts said gold
seemed caught in a tug-of-war between investors whose risk
appetite has grown and sell any rally, and those who still see
the yellow metal as a safe haven and buy on dips.
Spot gold <XAU=> had slipped to $880.85/882.05 an ounce by
2:42 p.m. EDT (1842 GMT) from $883.30/884.50 by late Tuesday
trade in New York.
U.S. gold for June delivery <GCM9> finished $2.60 higher at
$885.90 an ounce on the COMEX division of the New York
Mercantile Exchange.
The precious metal touched a high of $889.00 an ounce in
the spot market as equities weakened in Europe and the United
States, boosting gold's appeal as a safe haven. []
"Gold has been largely taking cues from stock market moves
across the globe, rather than its true fundamentals," said
Pradeep Unni, senior analyst at Richcomm Global Services.
A recovery in the equity markets suggests some gold
investors are selling the metal to buy back into stocks.
Gold cut its late gains to trade lower, then seesawed
around unchanged, after the Federal Reserve issued its latest
FOMC minutes. At 2 p.m. EDT (1800 GMT), minutes from the March
17-18 policy-setting meeting noted a steep drop in economic
activity. Story: [] Text: []
"The assessment of the economy is very bad. This is clearly
a big problem that they are worried about. They have their
actions in place," said Robert Brusca, chief economist at Fact
and Opinion Economics in New York.
Gold analysts said they thought the tame inflation outlook
within the report caused moderate selling.
Earlier, JPMorgan issued a report with raised gold price
forecasts for 2009 and 2010, citing prospects for inflation and
weakness in the dollar as supportive factors. []
Morgan lifted its 2009 price view for gold to $960 an ounce
from $831 previously, and its 2010 forecast for the precious
metal to $950 an ounce from $825.
The forecasts come a day after increased price projections
issued by metals consultancy GFMS for gold, projecting $1,100
an ounce in 2009 as investment is supported by fears about
rising inflation, potential dollar weakness, and fears over
financial instability - GFMS. []
EBBED
Investment demand has remained firm, with holdings of the
world's largest gold-backed exchange-traded fund, the SPDR Gold
Trust <GLD>, remaining near record levels on Tuesday.
"Gold's price trajectory firmly rests in the hands of
investors," said Barclays Capital in a note.
"A weaker dollar and a potential build in inflation are
likely to spur investors to increase their exposure to gold and
allow prices to gain upward traction once again."
Among other precious metals, spot platinum <XPT=>
strengthened to $1,172.50/1,182.50 an ounce from $1,162
previously. The metal rebuilt some gains in the first quarter
after tumbling by two-thirds last year from its $2,290 record
hit in March 2008.
Investors see the metal as good value now at lower levels,
expecting car demand will eventually recover when the economic
downturn runs its course. The metal is chiefly used as a
component in catalytic converters.
Spot silver <XAG=> was even at $12.25/12.31 an ounce by
2:35 p.m. EST (1835 GMT) late on Tuesday. Spot palladium <XPD=>
gained to $230.50/235.50 an ounce on Wednesday from
$223.00/228.00 previously.
(Reporting by Carole Vaporean; Editing by David Gregorio)
