PRECIOUS-Gold falls as dollar’s rise snaps rally

* Gold falls on dollar’s rise, snapping overnight rally

* Dollar’s strength outweighs tension in Europe, Korea

* Platinum group metals, silver also down
(Adds details, quotes, updates prices)

By James Regan

SYDNEY, May 25 (BestGrowthStock) – A rising U.S. dollar drove gold
down half a percent on Tuesday, reversing an overnight rally
sparked by fresh economic worries in Europe and a negative
session on Wall Street.

Further across-the-board strengthening of the U.S. dollar
against major currencies was prompting investors to sell into
the rally, traders said, with the next technical support point
marked between $1,165 and $1,175 an ounce, according to
technical analysis from Reuters and external sources.

Spot gold (XAU=: ) tumbled as low as $1,184.90 an ounce but
by 0232 GMT had rebounded to $1,190.45 versus $1,194.95 late
Monday. Platinum, palladium and silver dropped in gold’s wake.

In futures, gold for June delivery (GCM0: ) on the COMEX
division of the New York Mercantile Exchange dropped to
$1,190.50 an ounce against Monday’s close of $1,194.

The dollar’s new-found strength also hammered equity
markets across Asia, but that did little to snap a sell off in
bullion, despite gold’s traditional role as an alternative buy
when stocks sour.

“The pull from the dollar’s just been too strong for some
today so they’re selling into it, but that doesn’t mean gold’s
had it,” said a bullion trader in Sydney.

The mounting war of words on the Korean peninsula as South
Korea announced steps to tighten the vice on the North’s
economy in punishment for sinking one of its navy ships was
also triggering some buy orders [nTOE64N00Y], the trader said.

“There’s plenty of support for gold left out there,” he
said.

The world’s largest gold-backed exchange-traded fund, the
SPDR Gold Trust (GLD: ), saw its holdings rise to 1,236.889
tonnes as of May 24 versus 1,220.152 tonnes previously, marking
a fresh record high and underscoring a still-whetted appetite
for the metal.[ID:nWNAS8761]

Citi said in a note it was looking for scale-in buying down
to support levels of $1,165 an ounce, but on the upside, a
break above $1,205 an ounce to $1,230 and then $1,250 were the
next key levels for a resumption of a longer-term bull trend.

For a graphic of the gold technical outlook, click:
http://graphics.thomsonreuters.com/gfx/WT_20102505090211.jpg

For more analyses by Wang Tao, please click [TECH/C]

Europe’s fumbling response to Greece’s debt crisis and
deficits in other euro zone countries has unnerved markets over
the past six weeks, mostly benefiting gold as more funds were
parked in bullion, most recently after the Spanish central
bank’s takeover of a small lender at the weekend.

The euro (EUR=: ) slipped to $1.2346 in Asian trade from
around $1.2376 late in New York on Monday when it lost more
than 1.5 percent.

Palladium (XPD=: ) tumbled $13 to $434 an ounce versus New
York’s late price, while platinum (XPT=: ) recoiled $19 to $1,510
an ounce.

Silver (XAG=: ) was bid at $17.74 an ounce against $17.98
late on Monday.
Precious metals prices
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1189.70 -0.35 -0.03 8.58
Spot Silver 17.74 -0.08 -0.45 5.41
Spot Platinum 1510.00 -16.50 -1.08 2.93
Spot Palladium 434.00 -10.50 -2.36 7.03
TOCOM Gold 3462.00 -3.00 -0.09 6.23
40738
TOCOM Platinum 4407.00 -59.00 -1.32 0.50
16394
TOCOM Silver 52.00 -0.90 -1.70 0.58
461
TOCOM Palladium 1260.00 -43.00 -3.30 8.15
551
Euro/Dollar 1.2310
Dollar/Yen 90.16
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.

Stock Market Research

(Editing by Clarence Fernandez)

PRECIOUS-Gold falls as dollar’s rise snaps rally