1 August 2003, 08:44  Gold stands ground in Asia despite strong dollar

TOKYO, Aug 1 - Gold steadied in Asia on Friday after skidding to a six-day low overnight, but failed to make much headway as a strong dollar and upbeat U.S. economic data kept bargain-hunters at bay. Better-than-expected U.S. economic growth figures had sent bullion tumbling in New York as traders continued to shift money into stocks and the dollar from safe-havens like bonds and gold. Speculation the U.S. economy might finally be on the mend sent the greenback to a three-month high against the yen and a two-week peak against the euro, making bullion more expensive for holders of other currencies. "I think people are trying to use the figures as an excuse to get rid of longs, or they have some fresh selling," said Ellison Chu, senior manager at Standard Bank London in Hong Kong. "Gold has been under pressure since yesterday...I think it's mostly people trying to get rid of their long positions before the weekend -- and we saw some profit-taking yesterday as well." Spot gold was fetching $354.75/355.25 an ounce at 0430 GMT, having wandered briefly as high as $355.50. That compared with $354.00/80 last quoted in New York. Tokyo gold futures <0#JAU:> hardly budged as the weaker yen offset downward pressure from overnight losses in New York, where COMEX futures plumbed eight-session lows. The most actively traded June 2004 gold contract on the Tokyo Commodity Exchange was up one yen per gram at 1,371 by early afternoon on respectable turnover of about 40,000 lots. Traders said bullion risked tumbling back towards the 200-day moving average at $344 if it failed to recapture the $355 mark, with much depending on the size of the speculative long position on COMEX as revealed by CFTC figures out later in the day. The market will also be watching key U.S. jobs and manufacturing data due on Friday for further evidence of stronger economic growth ahead. In the currency market, the dollar was at 120.33/40 yen , having hit a three-month high of 120.65 yen earlier. The euro was fetching $1.1238, just above a two-week low of $1.1225 carved out on Thursday. Spot silver gained one cent to $5.14/16 an ounce, while spot platinum lost $1 to $683/688 an ounce. Spot palladium was at $177/184 an ounce, up from $175.50/181.50 last quoted in New York.

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