SINGAPORE, June 11 (Reuters) - Gold rebounded on short
covering on Friday after falling around 1 percent in the
previous session, while a rise in ETF holdings to another
record showed bullion still attracted buying from investors.
But gold was still at the mercy of movements in equity and
currency markets, with rallies in shares likely to curb gains.
Gold hit a lifetime high $1,251.20 earlier this week on fears
the euro zone's sovereign debt crisis may spread.
Spot gold XAU= was at $1,219.50 an ounce by 0216 GMT, up
$3.70 from New York's notional close on Thursday, when it
slipped after a rally in Wall Street curbed safe-haven demand.
"I don't really see gold depreciating very soon to a great
extend," said Darren Heathcote, head of trading at Investec
Australia in Sydney.
"But I do think it wouldn't surprise me to see it ease back
a little more if we see another couple of days of positive news
in the stock market," he added.
U.S. gold futures for August delivery GCQ0 hardly changed
at $1,221.7 an ounce after a drop on Thursday as gains in the
euro eased fears about euro zone credit contagion.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust (GLD.P), said its holdings rose to a lifetime high
at 1,306.137 tonnes as of June 10. [GOL/SPDR]
Japan's benchmark Nikkei average .N225 rose 2.01 percent
to 9,734.33 on Friday after U.S. stocks posted their best day
in the last nine on Thursday in response to signs of health in
the euro debt market. [.T] [.N]
"It's too difficult to say with any certainty that the
market will go one way or the other, but certainly I would like
to think that we are going to get a period of stability and
probably see gold ease back a little bit," said Heathcote.
"If it did, we'll probably be targeting somewhere down around
the $1,175 area," said Heathcote, referring to a low seen in
The euro's short-covering rally paused above $1.2100 on
Friday, with the single currency squaring up to test
significant bands of resistance, and the Australian dollar held
strong gains as firmer share markets improved risk tolerance.
Investors also breathed a sigh of relief after European
Central Bank President Jean-Claude Trichet said three-month
emergency loans to banks would continue until September and
when Germany's high court rejected efforts to block German
guarantees for euro zone financial aid.
"There's a bit of bargain hunting but I think if we see
more rebound in stocks, then gold will drift down," said a
dealer in Hong Kong.
"I don't think there's buying from jewellers. People are
also waiting for more clues, whether the euro will continue to
U.S. crude futures stood steady on Friday after closing at
a four-week high above $75 a barrel a day earlier on the back
of a Wall Street rally and a rosier oil demand forecast by
International Energy Agency. [O/R]
Precious metals prices at 0216 GMT
Metal Last Change Pct chg YTD pct chg
Spot Gold 1219.50 3.70 +0.30 11.30
Spot Silver 18.29 0.10 +0.55 8.67
Spot Platinum 1544.50 10.50 +0.68 5.28
Spot Palladium 454.75 4.25 +0.94 12.15
TOCOM Gold 3600.00 -3.00 -0.08 10.46
TOCOM Platinum 4587.00 82.00 +1.82 4.70
TOCOM Silver 54.30 0.60 +1.12 5.03
TOCOM Palladium 1350.00 23.00 +1.73 15.88
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)