* SPDR ETF holdings reach record
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By Jan Harvey
LONDON, Jan 27 (Reuters) - Gold held below $900 an ounce on
Tuesday, giving up some of the previous sessions' gains, as
easing risk aversion dampened interest in the precious metal.
Spot gold <XAU=> was quoted at $898.65/900.25 an ounce at
1403 GMT, against $902.65 in New York late on Monday. Earlier it
slipped to a low of $891.60 an ounce.
U.S. gold futures for February delivery <GCG9> on the COMEX
division of the New York Mercantile Exchange fell $10.30 an
ounce to $898.50.
"One of the things that has really helped gold a lot has
been the issues in the banking system," Michael Widmer, an
analyst at BNP Paribas, said.
"Looking at the newsflow over the last few days, there was a
bit of relief after Barclays' announcement (on its
performance)," he said. "That took away some of the immediate
buying (of gold)."
On the currency markets, typically a key driver of gold, the
euro ceded early gains after hitting a one-week high versus the
dollar. However, this failed to pressure gold as it lifted from
lows. []
Gold typically moves in the opposite direction to the
dollar, but its usual relationship with the currency has
weakened, with both assets slipping earlier on Tuesday as risk
aversion eased.
"A stronger dollar implies panic about the economic outlook
but should mean a weaker gold price, in theory," Daniel Smith,
an analyst at Standard Chartered, said.
"The fact that that (relationship) has broken down
highlights how worried people are about where they can put their
money and who they can trust."
A Reuters survey of 52 analysts published on Monday showed
most expect gold to hold its ground in 2009 despite expected
falls in other asset prices, on worries over the global economic
outlook and turmoil in the financial markets. <PREC/POLL>
Investment in physically backed products such as
exchange-traded funds has been strong in recent weeks as
investors seek a safe store of value.
Holdings of New York's SPDR Gold Trust <GLD> inched up to a
new record for the sixth consecutive session on Monday, and have
climbed more than 52 tonnes since the beginning of the year.
London-based ETF Securities said its gold-backed ETFs saw
inflows of 420,000 ounces last week.
SENSITIVE
However, gold jewellery demand remains weak, dealers say.
"As the demand for jewellery is very sensitive to price
movements, demand for gold from India, Turkey and the Middle
East, the main centres of the gold jewellery industry, should
continue to weaken," said Commerzbank.
Silver <XAG=> softened in line with gold to $11.98/12.06 an
ounce from $12.04 an ounce late on Monday.
The Reuters survey showed most analysts expected silver
prices to fare better than those of platinum and palladium, as
risk aversion boosts its appeal as a safe haven. []
The platinum group metals are also under pressure from
gold's fall. Both platinum and palladium suffered in recent
months from fears over falling demand from carmakers, who
account for around half of global consumption.
"Demand weakness is likely to weigh on the market in (the
first half) and prices are likely to gain traction in line with
a pick up in the economic growth towards the end of the year,"
Barclays Capital said in a note.
South Africa-focused Aquarius Platinum <AQP.L> said it
expects to report a first-half after-tax loss of $75-$85 million
due to weak metals prices. Attributable production of PGMs rose
2.7 percent in December, it added. []
Platinum <XPT=> edged down to $944.50/954.50 an ounce from
$959.59, while palladium <XPD=> eased to $189/194 an ounce from
$190.
(Editing by Sue Thomas)
