Gold hits record off 3-week high, On euro-priced bullion
6:42 PM
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Gold off 3-week high, euro-priced bullion hits record SINGAPORE, May 25 (Reuters) - Gold inched down on Wednesday, having rallied to its highest level in three weeks in the previous session, but bullion priced in euro struck a record on concerns about the impact of a possible debt default by Greece on other euro zone economies.
The euro moved back towards a two-month low hit earlier this week on nagging fears about Europe's debt crisis, while Moody's warned a Greek debt default would hurt other peripheral euro zone states and push Portugal and Ireland into junk territory.
[ID:nLDE74N0AQ] Spot gold slipped 85 cents to $1,524.90 an ounce by 0310 GMT after rising as high as $1,527.45 on Tuesday, its strongest since May 4. Bullion was still below a lifetime higharound $1,575 an ounce struck in early May.
A firmer dollar , which edged up against a basket of currencies, weighed on dollar-denominated gold, but concerns about the euro zone's spreading debt crisis and a rise in ETF holdings should keep a floor under prices.
"Overall sentiment for the long-term is still bullish. But I think for the short-term, we'll start to see resistance at $1,530 after rising from the downside of $1,470-$1,480 up to this level," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
"The physical sector is a bit quiet today. People seem to be scared about buying," said Leung, referring to a lack of interest from the jewellery sector.
Premiums for gold bars were steady in Hong Kong at $1.6 an ounce to the spot London prices.
Euro-priced gold hit a record above 1,085 euros an ounce. Gold priced in sterling held near a lifetime high struck on Tuesday.
"Unless the crisis in Europe is resolved and there's more clarity on how the debt problems can be solved, I think the euro will be under pressure," said a dealer in Singapore.
"With greater safe-haven flows into gold, there's a chance that gold priced in euro as well in pounds will continue to rally. I guess for the dollar-denominated gold, when the dollar rises, then bullion will come under some pressure."
Europe's policy options to avert a Greek default are narrowing fast after the ECB and ratings agencies warned against even voluntary debt rescheduling and Athens highlighted its urgent need for more EU cash. [ID:nLDE74N0JZ]
Holdings of the largest gold-backed exchange-traded-fund (ETF), New York's SPDR Gold Trust , rose 0.38 percent on Tuesday, while that of the largest silver-backed ETF, New York's iShares Silver Trust , dropped 0.51 percent.
Spot gold may end its current rebound around $1,536 per ounce, as it is expected to revisit the May 5 low of $1,462.40, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.
Silver was little changed at $36.56 an ounce after rising as high as $36.68 on Tuesday, its highest since May 11. The metal was below a record of $49.51 hit on April 28.
In other markets, the Nikkei edged down 0.3 percent, while Brent crude slipped below $112 a barrel on a smaller-than-expected U.S. crude draw.....READ MORE
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