* Gold falls as firmer dollar and stocks weigh
* Platinum hits 12-week high in correction from sell-off
By Risa Maeda
TOKYO, Jan 7 (Reuters) - Gold fell on Wednesday as a stronger
dollar versus the euro and gains in share prices reduced the
metal's appeal as an alternative asset, while platinum extended
its rise to a 12-week high.
Gold had been well underpinned late last year when demand
concerns hit many commodities including platinum. These other
commodities are now recovering in a correction but gold is
lagging behind, analysts said.
On Tuesday, gold hit a two-week low of $838.55 in New York,
while the dollar extended its rally to a one-month high against
the euro.
As of 0301 GMT, gold <XAU=> had fallen 0.8 percent to $856.40
an ounce from New York's notional close of $863.35.
"Gold came under pressure from a stronger dollar as well as
gains in U.S. shares. Behind them lie a sort of euphoria in the
U.S., or strong expectations for President-elect (Barak) Obama,"
said Tatsuo Kageyama, analyst at Kanetsu Asset Management.
"A gold rally above $900 now looks highly unlikely and
instead we should be prepared for a risk that it will test
further downside," he said.
A stronger dollar makes dollar-based gold more expensive for
holders of other currencies. A rally in stocks often stokes
concerns about an outflow of money from gold.
The dollar held onto the previous day's gains on Wednesday
amid hopes for an aggressive stimulus package from the Obama
administration. []
Persistent signs of economic weakness in the euro zone that
may force its central bank to cut interest rates further also
helped pushed the euro down against the dollar.
The euro slipped 0.4 percent to $1.3480 <EUR=> after having
dropped as low as $1.3312 on Tuesday.
U.S. gold futures were lower in Asia after rising about 1
percent in New York on Tuesday. Gold futures for February
delivery <GCG9> stood at $858.2 per ounce, down $7.8 or 0.9
percent from Tuesday's settlement on the COMEX division of the
New York Mercantile Exchange.
In contrast, cash platinum <XPT=> rose as high as $975.50 an
ounce, the highest since Oct. 15, helped by buybacks from
investors and extended gains in the Tokyo futures market.
Platinum later came off its highs and stood at $974.00 an
ounce, up 0.9 percent from $965.50 in New York.
The December platinum contract on the Tokyo Commodity
Exchange <0#JPL:> rose 113 yen per gram to 2,950 yen. The TOCOM
December gold contract <0#JAU:> gained 55 yen per gram to 2,598
yen.
Portfolio rebalancing prior to a scheduled index rejig by
commodity index funds tracking the Dow Jones-AIG Commodity Index
<.DJAIG> may have been supportive to gold and silver.
The Dow Jones AIG recalculates the weightings for the
individual commodities in its index yearly and is set to raise
the weightings for gold and silver later this week to next week.
[]
But analysts say such a technical effect would not last long
beyond the transition period.
Cash silver <XAG=> slipped to $11.30 an ounce from $11.44 in
New York. Palladium <XPD=> eased to $195 an ounce from $196.
Precious metals prices at 0312 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 857.85 -5.50 -0.64 -2.53
Spot Silver 11.32 -0.12 -1.05 0.00
Spot Platinum 975.00 9.50 +0.98 4.61
Spot Palladium 196.00 0.00 +0.00 6.23
TOCOM Gold 2598.00 55.00 +2.16 0.97 18513
TOCOM Platinum 2950.00 113.00 +3.98 11.24 8345
TOCOM Silver 339.90 13.90 +4.26 6.45 286
TOCOM Palladium 611.00 48.00 +8.53 11.09 312
Euro/Dollar 1.3504
Dollar/Yen 93.80
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Editing by Chris Gallagher)
