* Gold below $1,400, Japanese stocks slip
* Coming Up: U.S. Consumer prices Feb; 1230 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, March 17 (Reuters) - Gold dropped to stay below
$1,400 on Thursday as mounting fears about a nuclear catastrophe
in Japan prompted investors to sell the bullion to cover losses
in other markets, but a rise in ETF holdings suggested weaker
prices had spurred buying interest.
Gold fell $8.91 to $1,390.39 an ounce by 0229 GMT. It
struck a record around $1,444 last week, when investors poured
money on gold as oil jumped on violence in Libya and after the
downgrade of Greece's credit rating reignited worries about euro
zone sovereign debt.
"There are mixed views with respect to the catastrophe in
Japan. Few sections of investors believe that demand may see
surge in the coming sessions which could take gold to fresh
record highs," said Pradeep Unni, senior analyst at Richcomm
Global Services in Dubai.
"At the same time there is a view that Japanese retailers or
banks may sell gold to raise immediate cash. Banking is
completely impossible and cash in hand is either burnt or washed
off. This makes gold vulnerable to sell off, if situations do
not improve."
Japanese stocks slid 3 percent after a surge in the yen to
a record high stoked fears that a stronger currency would
compound the economic hit from a worsening nuclear crisis,
triggered by last week's devastating earthquake and tsunami.
Operators of a quake-crippled nuclear plant in Japan again
deployed military helicopters in a bid to douse overheating
reactors, as U.S. officials warned of the rising risk of a
catastrophic radiation leak from spent fuel rods.
U.S. gold futures for April lost $5.1 an ounce to
$1,391 an ounce.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust , said its holdings edged up to 1,217.295 tonnes
by March 16 from 1,212.745 tonnes by March 15, which was their
lowest since May of last year.
Silver tracked gold lower. Platinum slipped to
its weakest since mid-December, while sister metal palladium
matched a 3-1/2-month low hit on Wednesday on worries the
crisis in Japan could hurt demand for auto catalytic converters.
Toyota Motor and other manufacturers are struggling
to restore production in the wake of Japan's worst temblor and
biggest tsunami ever, forcing them to absorb costs as factories
remain idle. Yet for exporters, persistent yen strength could
prove more damaging to profits.
In the physical market, some dealers in Singapore quoted
premiums for gold bars at $1.10 an ounce to the spot London
prices, up from $1 in the previous day due to tighter supplies
and a drop in bullion prices.
"We've experienced a seasonal shortage before, but this time
around, refineries are saying they do not get enough materials
back from the market to generate supply," said a dealer in
Singapore.
In the energy market, U.S. oil prices slipped as much as 1.4
percent to below $97 on Thursday, as the worsening nuclear
crisis in Japan offset intensifying clashes in the streets of
Bahrain.
Precious metals prices 0229 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1390.39 -8.91 -0.64 -2.05
Spot Silver 33.79 -0.41 -1.20 9.49
Spot Platinum 1669.24 -17.26 -1.02 -5.56
Spot Palladium 686.97 -7.53 -1.08 -14.08
TOCOM Gold 3559.00 -87.00 -2.39 -4.56 72341
TOCOM Platinum 4278.00 -123.00 -2.79 -8.90 21499
TOCOM Silver 85.50 -2.80 -3.17 5.56 1359
TOCOM Palladium 1748.00 -69.00 -3.80 -16.64 773
Euro/Dollar 1.3912
Dollar/Yen 79.32
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)
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