* Dollar dips, eases from three-month highs
* Bear trend in near term, but spike possible in thin market
(Updates prices and comments, adds details)
By Humeyra Pamuk
LONDON, Dec 24 (Reuters) - Gold prices rallied over 1
percent on Thursday to around $1,100 an ounce as the dollar fell
and due to robust investment flows in anticipation of higher
bullion prices.
The U.S. Securities and Exchange Commission took a
regulatory step on Dec. 22 that brought shares of ETF Securities
Platinum and Palladium trusts closer to final approval for trade
on the New York Stock Exchange, lifting platinum and palladium
prices to their highest in a week. []
Spot gold <XAU=> was at $1,099.55 an ounce by 1330 GMT,
versus $1,087 an ounce late in New York on Wednesday. Bullion
tumbled to a seven-week low of $1,074.10 an ounce earlier this
week.
Analysts said the price moves were partly exaggerated due to
low liquidity because of the Christmas holiday period, but the
fundamentals that sent gold to an all-time high of $1,226.10 an
ounce in early December were intact.
"Gold's rising because of a weaker dollar," said Daniel
Smith, analyst at Standard Chartered. "But also the recent
sell-off was a bit overdone as a lot of the factors that
supported gold are still in place."
The dollar dipped, coming off three-month highs against a
basket of currencies after weak U.S. housing data the previous
day dampened optimism about the outlook for the U.S. economy.
[]
A weaker dollar makes gold cheaper for non-U.S. investors
and boosts its appeal as an alternative asset.
At current levels, bullion was set to post its biggest
one-day percentage gain in more than three weeks.
"Investor flows have held up pretty well. Physical demand in
places like India has been strong and I think that's going to be
supportive of the prices," Smith said, adding he expected
volatile trade due to holiday-thinned liquidity.
U.S. gold futures for February delivery <GCG0> rose 1.1
percent to $1,106.40, compared with $1,094.00 an ounce on the
COMEX division of the New York Mercantile Exchange. Futures also
hit a seven-week low of $1,075.20 on Tuesday.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,132.708 tonnes as
of Dec. 23, unchanged from the previous business day and staying
just below a record high of 1,134.03 tonnes hit on June 1.
[]
The world's largest silver-backed exchange-traded fund,
iShares Silver Trust <SLV>, said its silver holdings stood at
9,492.97 tonnes as of Dec. 23, unchanged from the previous
business day, after easing from a record high of 9,514.35 tonnes
on Dec. 22. []
Among other precious metals, spot silver <XAG=> was bid at
$17.24 an ounce against $17.09.
Platinum and palladium rose by nearly 3 percent and over 5
percent respectively after the SEC said on its website that
orders were granted to approve a proposed rule change for ETFS
Platinum and Palladium Trusts to list and trade shares.
ETF Securities currently operates a range of exchange-traded
commodities in Europe and Asia. Once its application gets final
approval, the products will be the first platinum and
palladium-backed ETFs in the United States.
"We're aware of the 19B4 approval order but the SEC
registration process is a multi-step process and is still
ongoing and therefore we cannot comment," a spokesman for ETF
Securities told Reuters.
Platinum <XPT=> was at $1,454 ounce against $1,418.50, while
palladium <XPD=> was at $372.50 against $355.50.
(Additional reporting by Chikako Mogi, Editing by Keiron
Henderson and Sue Thomas)
