* Platinum falls to 7-week low, palladium 2-week low
* Gold soft, but longer-term bullish trend intact
* Coming up: U.S. CPI, October; 1330 GMT
By Rujun Shen
SINGAPORE, Nov 17 (Reuters) - Gold edged lower on
Wednesday, as mounting fears over Ireland's fiscal health
sparked a strong rally in the dollar, pressuring bullion, while
worries about China tightening monetary policy weighed on
sentiment.
Euro zone finance ministers agreed on Tuesday to lay the
groundwork for bailing out Ireland's banking sector with the
IMF, but said Dublin had to decide itself whether to request
the aid. []
The dollar hit seven-week highs against the euro as a
result. []
"In the short term, the Ireland crisis may weigh on gold
because it is boosting the dollar," said Hou Xinqiang, an
analyst at Jinrui Futures in China. "But if going forward it
spilled over to other nations and caused concerns on the health
of the entire euro zone economy, that would help support gold."
Spot gold <XAU=> fell 0.2 percent to $1,337.41 an ounce by
0320 GMT, extending a two percent fall in the previous session.
U.S. gold futures <GCZ0> remained little changed at
$1,337.8.
Gold may head down further to $1,330, or even lower after
it broke below a key support level around $1,350, analysts and
traders said.
"It (Ireland) is probably an excuse to offload the heavy
long positions that have been built in the past couple of
months," said a Hong Kong-based trader.
But uncertainties in the global economic recovery and
worries over inflation down the road will continue to attract
investors to gold.
"Short-term looks a bit soft, but it still hasn't derailed
the medium- and long-term bullish sentiment. Since the market
is heavily one-sided, it won't be a surprise to see continuous
long liquidation and some profit-taking," the trader said.
The Relative Strength Index on spot gold, used to measure
trade interest, fell to 45.029, its lowest since early August.
In early October, the RSI hit an 11-year high of 86.246,
suggesting the market was well overbought.
CHINA TIGHTENING FEAR
Speculation is mounting that China may step up policy
tightening to curb inflation, after October's reading hit a
25-month high.
"The market has shifted from anticipation on inflation to
expectations on measures to fight inflation," the analyst at
Jinrui Futures said. "That's why we have seen a broad sell-off
in commodities."
Amid talks of an imminent interest rate hike and the
government's pledge to control food price rise, a number of
commodities traded on China's exchanges, including soybean,
soyoil, copper and zinc, fell by their daily limit. []
[] [] []
The benchmark Shanghai Composite Index <> opened down
1.5 percent on tightening fears, after it slumped to a
one-month low in the previous session. []
Spot platinum <XPT=> fell to a seven-week low of $1,624,
before recovering to $1,629.24.
Spot palladium <XPD=> declined to a two-week low of
$630.22.
Platinum group metals are set to continue to thrive in 2011
as a tightening of the metals' underlying fundamentals keeps
sentiment upbeat, metals refiner Johnson Matthey said in a
report. []
Precious metals prices at 0320 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1337.41 -2.39 -0.18 22.06
Spot Silver 25.40 -0.07 -0.27 50.92
Spot Platinum 1629.24 -9.26 -0.57 11.06
Spot Palladium 633.72 -5.75 -0.90 56.28
TOCOM Gold 3592.00 -47.00 -1.29 10.22
57702
TOCOM Platinum 4408.00 -81.00 -1.80 0.62
14217
TOCOM Silver 68.30 -0.30 -0.44 32.11
1731
TOCOM Palladium 1704.00 -89.00 -4.96 46.27
768
Euro/Dollar 1.3512
Dollar/Yen 83.32
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Manash Goswami)
