December 24, 2008 / 5:58 AM / 10 years ago

PRECIOUS-Gold steadies after early slide as dollar eases

* Gold steady as dollar drops

* Thin holiday trading keeps bullion in tight price range (Adds details, comment, updates prices)

By James Regan

SYDNEY, Dec 24 (Reuters) - Gold reversed early losses on Wednesday to trade steady as the U.S. dollar slid against other currencies in the face of mounting negative economic signs.

In light trading ahead of Christmas, spot gold XAU= was fetching $838.65 an ounce at 0524 GMT versus $838.55 late in New York as declines in the greenback against the euro and yen enticed investors, dealers said.

The dollar slipped against the yen, pressured by selling from Japanese exporters a day after dismal U.S. growth and housing data suggested a prolonged recession ahead, prodding more buyers into bullion, dealers said. [/USD]

Data on Tuesday showed the U.S. economy contracted 0.5 percent in the third quarter and existing home sales fell by a record amount last week as the recession picked up pace. [ID:nLN072227]

The euro rose 0.3 percent against the dollar to $1.3960 EUR=.

“Gold prices should ease on mild profit taking, although a sharp move in the U.S. dollar will dictate sentiment,” Australia & New Zealand Bank chief commodities strategist Mark Pervan said in a client note.

Gold initially added to overnight declines as the dollar strengthened against most major currencies in holiday-thinned trade, prompting investors to cash in on year-end profits after a recent rally. [ID:nLN092715]

A modest 0.13 percent rise in oil to $39.03 a barrel held little sway over the direction of bullion.

COMEX gold futures for February GCG9 rose 0.16 percent to $839.40 per ounce in after-hours trade after losing $9.10 or 1.07 percent on Tuesday.

Following a return to trading after a holiday on Tuesday, the benchmark December gold contract on the Tokyo Commodity Exchange <0#JAU:> fell 16 yen to 2,438 yen. The previous key contract for October was down 13 yen at 2,437 yen, Reuters data showed.

Spot platinum XPT= dropped $5 to $837.00 an ounce.

Spot palladium was unchanged rose $1 to $171.00 an ounce, while silver XAG= recouped some of Tuesday’s hefty losses to trade 7 cents higher at $10.29. Precious metals prices at 0517 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 838.25 -0.30 -0.04 0.67 Spot Silver 10.29 0.07 +0.68 -30.33 Spot Platinum 837.00 -5.00 -0.59 -44.93 Spot Palladium 171.00 1.00 +0.59 -53.53 TOCOM Gold 2438.00 -16.00 -0.65 -20.33 14249 TOCOM Platinum 2450.00 -35.00 -1.41 -54.11 4754 TOCOM Silver 298.30 -15.20 -4.85 -44.86 435 TOCOM Palladium 519.00 3.00 +0.58 -61.58 174 Euro/Dollar 1.3959 Dollar/Yen 90.40 (Editing by Ben Tan)

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