Gold ends lower as dollar rises; ETF at record

NEW YORK/LONDON (Reuters) - Gold fell on Friday as precious metals came under pressure from a strengthening dollar and reduced safe-haven demand after recent U.S. steps to stem an economic crisis.

A salesman arranges gold bracelets inside a jewellery showroom in Jaipur, capital of India's desert state of Rajasthan January 12, 2009. REUTERS/Vijay Mathur

Gold was at $921.55 an ounce at 2:45 p.m. EDT (1445 GMT), down 1.2 percent from $933.05, its late quote in New York on Thursday.

U.S. gold futures for April delivery settled down $16.80, or 1.8 percent, at $923.20 an ounce on the COMEX division of the New York Mercantile Exchange.

The dollar rose, with the euro extending declines to fall more than 2 percent against the U.S. currency as Wall Street fell further. <USD/> .N.

A higher U.S. currency makes metals priced in dollars more expensive for holders of other currencies.

“It’s all dollar related,” said David Thurtell, an analyst at Citi, adding that he expected gold to drift lower.

“Gold’s going to track between $875 an ounce and $950 in the next 18 months,” he said.

U.S. and European stock markets dropped on Friday, but analysts said that recent steps by the U.S. government to bolster the ailing economy may encourage investors to brave riskier assets such as equities.

Nick Moore, a commodity strategist at RBS Global Banking & Markets, said investors were pocketing profits on gold after a strong quarter, but prices of the precious metal could march higher still.

Bullion has risen about 5.5 percent so far in the first quarter, having recovered from a six-week low of $882.90 hit on March 18. But it is still 7 percent off the 11-month high above $1,000 set in February, and well under an all-time peak of $1,030.80 hit in March 2008.

The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said holdings remained unchanged at a record 1,124.99 tons as of March 26. <GOL/SPDR>

For a graphic, click on: here

For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on:



Gold prices have been stuck in ranges as players await new incentives now that the U.S. government appears to have taken all measures possible to deal with the country’s economic and financial distress, traders said.

Traders said some funds may have shifted from gold to silver trust holdings, but the impact on spot gold prices was limited due to the smaller size of the silver trust than that of gold.

Silver was at $13.29 an ounce, down 1.3 percent from its previous finish of $13.46.

The world’s largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings rose 116.49 tons or 1.4 percent from the previous day to a record 8,296.93 tons as of March 26.

For a graphic, click on: here

Platinum was at $1,130.00 an ounce, down 1.0 percent from its previous close of $1,141. The metal, used in auto catalysts to clean car emissions, hit a six-month high of $1,159.00 an ounce on signs that there is more government aid for U.S. automakers.

Palladium was at $217.00 an ounce, down 1.8 percent from its previous finish $221.

Additional reporting by Chikako Mogi in Tokyo; Editing by Marguerita Choy