PRECIOUS-Gold dips from near 7-mth high; stimulus support stays

Mon Sep 24, 2012 3:05am EDT

* Gold falls more than 1 pct, platinum down as much as 2 pct
    * SPDR Gold Trust holdings hit highest in more than 2 years
    * Coming up: Germany IFO business climate index; 0800 GMT

 (Adds details; updates prices)
    By Rujun Shen
    SINGAPORE, Sept 24 (Reuters) - Gold pulled back from a near
seven-month high on Monday, but a recent spate of stimulus
measures from central banks that has buoyed bullion is expected
to continue supporting prices.
    Gold has gained more than 10 percent over the last five
weeks, its biggest such gain since September 2011, after the
Federal Reserve and European Central Bank each announced fresh
monetary easing measures to support their economies.
    Easy monetary policies drive investors to seek a hedge
against higher inflation risk caused by rampant cash printing by
central banks. A low interest rate environment also helps
non-yielding gold attract investors.
    "I'm not worried at all about gold," said Dominic Schnider,
an analyst at UBS Wealth Management in Singapore. "Despite the
short-term retracement, gold is still a buy, and is still
attractive. The $1,950 level is still a guidance."
    Spot gold fell as much as 0.9 percent to $1,757.14 an
ounce, after hitting $1,787.20 hit in the previous session, its
highest since Feb. 29. Gold rose 0.6 percent last week, its
fifth straight week of gains. It stood at $1,759.59 by 0651 GMT.
    U.S. gold lost 0.9 percent to $1,762.40.
    A stronger dollar also weighed on commodities priced
in the greenback, making them less attractive to buyers holding
other currencies. 
    "I wouldn't be surprised to see gold pull back to the $1,750
area but dips will continue to be bought," a Singapore-based
trader said.
    Spot platinum dropped as much as 2 percent to
$1,603.5 an ounce and spot silver fell 1.9 percent to an
intra-day low of $33.78. 
    Equities and other commodities also weakened, as investors
returned to worrying about the global economic prospects with a
string of data due this week.  
    
    
    SPDR GOLD TRUST HOLDINGS HIT 2-YEAR HIGH
    Investors piled into gold after the U.S. Federal Reserve
announced a fresh round of quantitative easing earlier this
month. Holdings in the SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, had climbed to
1,317.762 tonnes by Sept. 21, its highest level since July 2010.
    In the U.S. gold futures and options market, speculators
raised their net long positions to 178,426 contracts in the week
ended Sept. 18, the highest level in nearly seven months.
 
    Net length in platinum jumped to a historical high of 27,643
lots. 
    Among other news, in top platinum supplier South Africa,
authorities have issued an arrest warrant for ANC renegade
Julius Malema, a key backer of wildcat strikes that have spread
from platinum to gold producers in recent weeks. 
    
     Precious metals prices 0651 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1759.59  -12.85   -0.72     12.52
  Spot Silver        33.94   -0.48   -1.39     22.57
  Spot Platinum    1610.00  -27.50   -1.68     15.58
  Spot Palladium    656.97  -11.63   -1.74      0.69
  COMEX GOLD DEC2  1762.40  -15.60   -0.88     12.48        33247
  COMEX SILVER DEC2  34.00   -0.64   -1.86     21.78        10529
  Euro/Dollar       1.2937
  Dollar/Yen         78.06
  COMEX gold and silver contracts show the most active months 
 
 (Editing by Miral Fahmy)
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