(Updates with prices)
By Atul Prakash
LONDON, April 18 (Reuters) - Gold slipped more than 3
percent to a one-week low on Friday as the dollar jumped after
better than expected earnings results from Citigroup <C.N>.
The metal <XAU=> fell as low as $904.35 an ounce and was
quoted at $911.90/912.90 at 1500 GMT, against $938.90/939.70 in
New York late on Thursday, when it hit a three-week high.
The dollar touched a seven-week high against the yen and
pulled further away from a record low versus the euro after
Citigroup's results surprised investors with results that were
less bleak than many had feared. []
"Precious (metals) are all tracking the dollar," said David
Thurtell, analyst at BNP Paribas. "Investors who have been
seeking the relative safety of commodities have unwound some of
that long position to get back into equities."
A rising dollar makes dollar-denominated gold more expensive
for holders of other currencies. The metal, traditionally seen
as a safe-haven asset and a hedge against oil-led inflation,
often thrives on bad news.
Oil recovered to trade at record highs, after falling more
than $2 a barrel on worries about a possible slowdown in China,
the world's second biggest energy consumer.
Looking ahead, traders said bullion markets were waiting for
a meeting of the U.S. Federal Reserve later this month. Further
aggressive interest rate cuts in the United States could hit the
dollar and boost gold prices.
"We continue to find gold uninspiring at the moment and are
disappointed that the metal is so far off its recent all-time
high," said John Reade, analyst at UBS Investment Bank.
"While some long liquidation has occurred and jewellery
demand has reappeared, neither of these indicators is telling us
that gold is a raging tactical buy."
RISK APPETITE
Huge writedowns from U.S. banks have undermined the health
of the U.S. economy, and sentiment towards the dollar.
But some banks and analysts are now saying the worst of the
turmoil that has plagued financial markets since last August
could be coming to an end.
"The increasing risk appetite of investors could lead to
shifts of assets into stock markets, which might be negative for
gold," analysts at Dresdner Kleinwort said in a report.
A metals analyst in London said that short-term sentiment
had turned bearish because of the sell-off, but the metal might
recover on physical buying at price dips.
Palladium <XPD=> was down at $448/453 per ounce against
$458/463 in New York, and silver <XAG=> fell more than 3 percent
to $17.67/17.72 an ounce from $18.23/18.28 on Thursday.
Platinum <XPT=> fell more than 1 percent to a low of $2,017
an ounce before rising to $2,035/2,050, versus $2,042/2,052 late
on Thursday.
Analysts expected prices to hold firm.
"The South African power shortages are keeping the platinum
market on edge as a swift resolution to the structural problems
is far from near," Barclays Capital said in a report.
"We forecast prices to average $2,100/oz in Q2 as platinum
supplies are heavily dependent on South Africa and the delicate
power supply situation as well as mine safety concerns leave
mine output extremely susceptible to potential disruptions."
(Additional reporting by Pratima Desai and Alastair Sharp in
London; editing by Nigel Hunt)
