TOKYO, May 15 - Gold slipped in Asia on Thursday as the dollar battled to keep its distance from 10-month troughs against the yen, even as a new wave of economic and geopolitical anxiety thrust safe havens back into the limelight. The greenback's recovery from an overnight nadir of 115.55 yen helped lop more than a dollar off bullion by making the metal more expensive for players using other currencies. But traders said gloomy U.S. economic data and fresh fears of extremist attacks after this week's deadly bombings in Saudi Arabia were restoring gold to its rightful place as a hedge against uncertainty.
"I think the geopolitical risks are quite high at the moment," said Simon Klimt, head of commodities at Westpac Banking Corp in Sydney. "We had that euphoric sell-off because of the (speedy end to the Iraq) war, but we're back to focusing on those kinds of issues... "I'm not sure we're necessarily going to go much higher from here, but I certainly think the $330 base that we created is now going to be pretty solid." Spot gold was quoted at $351.05/55 an ounce at 0515 GMT, having been bid as high as $352.25 in the morning, an identical level to the New York close. Traders said it showed little sign of testing its nine-week high of $354.45 scored overnight. Gold has gained about 10 percent since its low for the year of $318.75 in early April, when the final stages of Washington's campaign to topple Iraqi leader Saddam Hussein obliterated what little remained of the metal's war premium. But gold is still some $35 shy of its seven-year peak of $388.50 hit in early February, the culmination of months of geopolitical finger-tapping.
On the Tokyo Commodity Exchange, gold futures <0#JAU:> got a boost from arbitrage buying by Japanese trading houses as the dollar steadied against the yen despite worries over the U.S. economy after gloomy April retail sales data. The benchmark April contract was up five yen per gram at 1,311 in mid-afternoon trade on light volume of under 30,000 lots or 30 tonnes. In the currency market, the dollar was fetching 116.17/18 yen , having clawed its way earlier as high as 116.44. Silver was unchanged from New York's close at $4.84/86. Platinum performed an about-face on early gains, jolted by lower lease rates and profit-taking on TOCOM. The white metal was fetching $660/665 an ounce, compared with an intraday high of $668 bid in the morning and $663/668 at New York's close.//