* Renewed bank, credit fears lend support to gold
* U.S. housing data, BNP Paribas downgrade in focus
* Coming up: U.S. new home sales in May on Wednesday
(Recasts, updates prices to market close, changes byline,
dateline, previous LONDON)
By Frank Tang
NEW YORK, June 22 (Reuters) - Gold rebounded on Tuesday as
renewed credit worries and concerns about a global economic
recovery triggered safe-haven demand after the metal tumbled
more than $30 in the previous session.
Bullion's rise following Monday's bearish chart reversal
pattern and near-record high open interest in COMEX futures
suggested the metal could resume its rally in the near term,
traders said.
Standard Bank analyst Walter de Wet said gold has an upward
bias in the next couple of weeks due to lingering worries about
Europe's overhanging debt
"After yesterday's sell-off, people thought it's worth
buying on the dip. Obviously with equity markets under pressure
people are more risk averse and that's supporting gold," said
de Wet.
A Fitch Ratings' downgrade of French bank BNP Paribas
<BNPP.PA> and surprise decline of U.S. existing home sales in
May renewed concerns over the pace of global economic recovery,
analysts said. U.S. stocks were down about 1 percent.
[]
Spot gold <XAU=> was at $1,239.15 an ounce at 2:28 p.m. EDT
(1828 GMT), against $1,231.65 in New York late on Monday. U.S.
gold futures for August delivery <GCQ0> settled up 10 cents an
ounce at $1,240.80.
On Monday, gold posted its biggest one-day drop in more
than a month due to a sudden decline of the euro and the
euphoria surrounding China's decision to relax the yuan's peg
to the U.S. dollar was viewed as overdone.
Rick Bensignor, chief market strategist at investment
banking group Execution Noble LLC, noted there was no
follow-through selling after Monday's bearish reversal, but a
technical indicator showed the market could be overbought.
"The bullish consensus is still very high in gold. It's
just universally agreed that gold's the investment to be in, so
there is always a concern to some level," he said.
Uncertainties ahead of a G20 summit this week supported
gold prices, as Germany, France and Britain announced plans on
Tuesday to introduce a bank levy to help meet the costs of the
financial crisis, underscoring a rift with key partners.
[]
China's decision to allow the yuan to rise against the
dollar ahead of G20 had prompted a rally in risk-related
assets, including industrial commodities, on Monday.
U.S. gold futures' open interest, an indicator of overall
market trading activity stayed near an all-time high on
Tuesday, suggesting gold bulls were still holding their long
positions, said COMEX gold floor trader Jonathan Jossen.
Gold futures and options trading volume was decent on
Tuesday, and a sizable move could be imminent as options
players were amassing positions, Jossen said.
The gold-to-silver ratio, which shows the number of ounces
of silver needed to buy an ounce of gold, stayed nearly flat at
about 66 on Tuesday, close to its lowest since late May in the
previous session.
Graphic:http://link.reuters.com/tyg53m
GOLD AS A CURRENCY?
Gold's appeal as a hedge against paper currency
depreciation increased after U.S. Treasury Secretary Tim
Geithner said the government's TARP bailout package was
projected to raise federal deficits by $105 billion.
[]
Among other precious metals, silver <XAG=> was at $18.79 an
ounce against $18.70.
Elsewhere platinum <XPT=> was at $1,584.50 an ounce against
$1,587, while palladium <XPD=> was at $484 against $490.
Platinum group metals, which are mainly consumed as
autocatalyst for vehicles, are being supported by expectations
for a recovery in carmaker demand.
News of encouraging vehicle consumption by China provided
underlying support to the PGMs.
Volkswagen's <VOWG_p.DE> Audi unit <NSUG.DE> signaled it
was set to sell more than 1 million cars this year as the
premium automaker rides a wave of growth in China.
[]
Prices at 3:02 p.m. EDT (1406 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1240.80 0.10 0.0% 13.2%
US silver <SIN0> 18.902 0.094 0.0% 12.2%
US platinum <PLN0> 1593.00 2.70 0.2% 8.3%
US palladium <PAU0> 489.95 -5.50 -1.1% 19.8%
Gold <XAU=> 1237.45 5.80 0.5% 12.9%
Silver <XAG=> 18.77 0.07 0.4% 11.5%
Platinum <XPT=> 1577.00 -10.00 -0.6% 7.6%
Palladium <XPD=> 483.00 -7.00 -1.4% 19.1%
Gold Fix <XAUFIX=> 1236.00 0.75 0.1% 12.0%
Silver Fix <XAGFIX=> 18.63 -74.50 -3.8% 9.6%
Platinum Fix <XPTFIX=> 1585.00 7.00 0.4% 8.1%
Palladium Fix <XPDFIX=> 487.00 5.00 1.0% 21.1%
(Additional reporting by Jan Harvey in London; Editing by
Sofina Mirza-Reid)
