Gold steady after drop; eyes greenback and Greece

* Gold firms, shrugs of mild dollar gains after sharp slide

* Greece debt, India rate hike worry

By Nick Trevethan

SINGAPORE, March 22 (BestGrowthStock) – Gold was steady on Monday
as dollar strength that drove bullion 1.7 percent lower in the
previous session, its biggest loss since early February,
weighed on the market.

The dollar was steady versus the euro on Monday, having
jumped on Friday on speculation that debt-laden Greece may have
to turn to the International Monetary Fund for help, rather
than its euro-zone neighbours, sending commodities sharply

“Gold was hit pretty hard on Friday as the U.S. dollar
strengthened. It depends on where the dollar goes and at the
moment it is looking a bit bullish,” said Peter McGuire,
managing director of CWA Global Markets in Sydney.

“The market is very slow at the moment I don’t see much
happening until we get a clear idea on what is happening with
the U.S. dollar. But it is not unusual to see it strengthen
around Easter.”

Spot gold (XAU=: ) rose 5 cent to $1,106.60 an ounce at 0358
GMT, trading just above its 30-day moving average. U.S. gold
futures for April delivery (GCJ0: ) on the COMEX division of the
NYMEX stood at $1,107.3 versus $1,107.60 at Friday’s close.

Markets were subdued with Japanese investors out for a
national holiday. An increase in benchmark rates by India’s
central bank on Friday to tame inflation has also worked to
keep gold prices in check. India is the world’s largest buyer
of gold.

The Reserve Bank of India increased the repo rate, the rate
at which it lends to banks, to 5.00 percent and the reverse
repo rate, the rate which it absorbs funds from the system, to
3.50 percent with immediate effect. [ID:nSGE62I0HP]

“The increase in Indian interest rates has weighed on gold.
The price today is up from its Friday night lows even though
the euro is softer again versus the dollar,” David Moore,
commodities strategist, Commonwealth Bank.

“We have spent quite a bit of time in the $1,100-$1,130
range recently. We are towards the bottom of that. My
inclination is that the gold price will end the year lower, but
it may spike higher supported by safe haven buying given the
fiscal situation in certain countries.”
Prices at 0358 GMT
Metal Last Change Pct chg Two day chg MA 30
Spot gold $1106.60 $0.05 +0.00% -4.43% $1106.41
Spot silver $16.91 -$0.02 -0.12% -6.99% $16.30
Spot plat $1599.75 -$4.75 -0.30% -0.20% $1547.30
COMEX gold $1106.70 -$0.90 -0.08% -1.84% $1109.38
Euro/dlr $1.351 -$0.001 -0.07% -0.18%
Dlr/yen 90.49 -0.04 -0.04% -0.04%

Investment Basics

(Additional reporting by Naveen Thukral; Editing by Ed Lane)

Gold steady after drop; eyes greenback and Greece