* Gold tracks oil lower, off record high
* Gold to retrace to $1,412-technical
* China adviser says Beijing should buy more gold
* Coming Up: Germany Industrial output Jan; 1100 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, March 9 (Reuters) - Gold tracked oil lower on
Wednesday and was under pressure from firmer equities, but
bargain hunting from jewellers and worries that violence in
Libya and the Middle East could spread may support prices that
have dropped from a lifetime high.
Silver was steady below a 31-year high. Gains in ETF
holdings indicated a growing interest in the metal, with the
gold/silver ratio hovering below 40:1 -- the lowest since
February 1998. Holdings in iShares Silver Trust , rose to
10,913.32 tonnes by March 8, their strongest since early
January.
Spot gold shed $2.04 to $1,426.15 an ounce by 0706
GMT, off a record high of $1,444.40 an ounce struck on Monday,
when investors poured money into bullion as violence flared in
Libya and after the downgrade of Greece's credit rating
reignited worries about euro zone sovereign debt.
"I feel it is consolidating, waiting for any lead out of
Libya. We'll see what happens on (Friday) prayer day around the
Gulf, and then we'll see whether or not there is need for
concern. I think that's the focus we have to follow," said
Jonathan Barratt, managing director of Commodity Broking
Services in Melbourne.
"If nothing happens on Friday, then I feel it will be a sigh
of relief that the contagion won't actually spread. As a result
of that, if we don't see it spread, then gold would come under
pressure."
Spot gold is expected to retrace to $1,412 per ounce based
on its wave pattern and a Fibonacci retracement analysis,
according to Wang Tao, who is a Reuters market analyst for
commodities and energy technicals.
Anti-government protests have flared in Egypt, Libya,
Tunisia and the Gulf, sending oil prices to their highest in
more than two years early in the week before losing ground after
reassurances from OPEC members of ample spare capacity.
However, top executives from some of the world's biggest
energy companies, including French major Total SA and U.S.-based
Hess Corp, on Tuesday said global oil supply is plentiful in
spite of Libyan supply disruptions, and urged U.S. policymakers
not to tap strategic oil stockpiles.
But tensions in Libya remained. Tanks and warplanes
intensified their offensive against rebels on Tuesday, as the
United States stressed that any no-fly zone to hobble Muammar
Gaddafi's forces had to have global backing.
U.S. gold futures for April hardly changed at
$1,426.3 an ounce. They had struck s record high at $1,445.70 on
Monday.
In other markets, the Nikkei extended gains for a second day
on Wednesday after a pullback in oil prices, while the euro fell
for a third straight session against the dollar as investors
were unconvinced that Friday's European summit would quell
concerns about the region's fiscal problems.
The physical gold market saw light buying from jewellers but
other consumers waited for cheaper prices.
"Definitely they will come back to buy but not at these
prices. I would say there's still selling interest at the
current level, but there's light demand here and there," said a
physical dealer in Singapore.
"There's much on silver after we heard about buying by China
earlier this week."
In main consumer India, domestic prices eased from its
record high on Tuesday, triggering a slight pick-up in physical
demand as traders sought to stock for the wedding season.
Jewellery is the most common gift during religious events and
weddings in India.
Separately, a Chinese government adviser was quoted by local
media reports as saying that the second largest consumer of the
precious metal should use some of its $2.85 trillion foreign
exchange reserves to buy more gold.
Precious metals prices 0706 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1426.15 -2.04 -0.14 0.47
Spot Silver 35.91 -0.09 -0.25 16.36
Spot Platinum 1800.50 -2.24 -0.12 1.87
Spot Palladium 791.50 2.28 +0.29 -1.00
TOCOM Gold 3815.00 29.00 +0.77 2.31 52263
TOCOM Platinum 4888.00 33.00 +0.68 4.09 10837
TOCOM Silver 95.40 2.00 +2.14 17.78 1624
TOCOM Palladium 2115.00 50.00 +2.42 0.86 757
Euro/Dollar 1.3892
Dollar/Yen 82.85
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Himani Sarkar)
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