* Gold below $1,400, Japanese stocks slip
* Coming Up: U.S. Consumer prices Feb; 1230 GMT
* Gold bars premiums up by half in Tokyo
(Updates prices, adds premiums in Tokyo)
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 bullion to cover losses in
other markets, but a rise in ETF holdings suggested weaker
prices had spurred buying interest.
Premiums for gold bars rose further to as much as $1.50 an
ounce in Tokyo, their highest since February, from $1 earlier
this week as supply tightened and investors chased the metal
after last week's devastating earthquake and tsunami.
Gold fell $6.60 to $1,392.70 an ounce by 0448 GMT.
It struck a record around $1,444 last week, when investors
poured money into gold as oil jumped on violence in Libya and
after a 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 a
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
away. This makes gold vulnerable to a sell-off, if situations do
not improve."
Japan's Nikkei stock benchmark was down 2 percent on
Thursday, cutting earlier losses as investors, shaken by a yen
surge and a deepening nuclear power plant crisis, warily picked
up shares savaged by heavy selling earlier in the week.
Operators of the nuclear plant 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 $3.5 an ounce to
$1,392.6 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, their lowest
since May of last year.
Silver tracked gold lower. Platinum slipped to
its weakest since 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 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, demand from investors in the western
part of Japan helped stir up trading in the country which is
battling to prevent a nuclear catastrophe. Gold bars were
offered at zero premium to the spot London prices last week.
"There's a food shortage here. Airports are jammed and
cargoes are disrupted. It's very difficult to import metal from
overseas, so Japanese premiums are a bit higher," said a dealer
at bullion trading house in Tokyo.
"But there's no problem in the western side of Japan, so
we've seen buying on dips from investors from that region."
In Singapore, some dealers 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.
Brent crude fell by as much as 1 percent on Thursday to
below $110 as the worsening nuclear crisis buffeted stock
markets, raising questions about the impact of the earthquake on
growth and energy demand.
Precious metals prices 0448 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1392.70 -6.60 -0.47 -1.88
Spot Silver 34.06 -0.14 -0.41 10.37
Spot Platinum 1667.74 -18.76 -1.11 -5.64
Spot Palladium 690.97 -3.53 -0.51 -13.57
TOCOM Gold 3547.00 -99.00 -2.72 -4.88 90299
TOCOM Platinum 4263.00 -138.00 -3.14 -9.22 29290
TOCOM Silver 85.60 -2.70 -3.06 5.68 1677
TOCOM Palladium 1760.00 -57.00 -3.14 -16.07 852
Euro/Dollar 1.3927
Dollar/Yen 79.03
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
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