PRECIOUS-Gold eases from record high after CME margin hike

Thu Aug 11, 2011 6:42am GMT
 

* Spot gold record at $1,813.79; U.S. gold at all-time high
$1,817.6
    * CME Group raises margin on U.S. gold futures
    * Spot gold to retrace $1,775/oz -technicals
    * Coming up: U.S. weekly initial jobless claims; 1230 GMT

 (Updates prices)	
    By James Regan and Rujun Shen	
    SYDNEY/SINGAPORE, Aug 11 (Reuters) - Gold eased on Thursday
from the session's record highs after the CME Group raised
margins on COMEX gold futures, but turmoil in the global
financial markets and fears of slower growth buoyed sentiment.	
    Spot gold hit an all-time high of $1,813.79, and U.S.
gold GCcv1 rose to a record high of $1,817.6 early in the day.	
    Both eased after the CME Group raised margins on
U.S. gold futures by 22.2 percent, driving spot gold down to
$1,787.61 an ounce by 0624 GMT, off 0.4 percent from the
previous close. 	
    U.S. gold traded up 0.3 percent at $1,789.90.	
    "Historically when margins are raised significantly it tends
to cause a bit of sell-off," said Darren Heathcote, head of
trading at Investec Australia. 	
    "We've seen some of it now, but it's difficult to see a
great deal of selling, because we are in very, very volatile and
uncertain times when markets are moving very violently. Gold has
proven too much of an attraction as an alternative investment
and the margins may not have as much influence."	
    On the relative strength index, spot gold fell to 82.7,
suggesting a heavily overbought market, although the index was
off its earlier level near 86, the highest since October 2010.
    The rapid rise in prices has prompted concern of a price
retracement.	
    "Gold is overbought and things are looking a little risky,"
said a physical dealer in Hong Kong, who felt gold could fall
towards $1,750.	
    "But as the debt worries linger and the stock market is
still on the downside, gold remains a safe haven."	
    Technical analysis suggested gold could fall to $1,775 an
ounce, said Reuters market analyst Wang Tao. 
 	
    
 	
    Gold's safe-haven allure has attracted investors fleeing the
risk of debt crisis contagion in Europe and slowing global
growth. Prices of cash gold have risen as much as 21 percent
since the end of June.	
    Stock market woes have helped push gold's ratio to the
S&P-500 stock index to its highest since 1988. But that
ratio remains far below its peaks of 1980 and the 1930s, and
gold is still below its inflation-adjusted record near $2,500.	
    Extreme market turmoil is forcing central banks to shift 
policy. Central banks in Japan and Switzerland said they would
rein in the appreciation of their currencies, while the U.S.
Federal Reserve promised to keep rates near zero for at least
two more years.  	
    "With the authorities in both Japan and Switzerland
announcing intentions to intervene to weaken their currencies,
gold remains the last protection against the potential for
widescale money printing as governments seek to recapitalise
their banks and restimulate their economies," UBS said in a
research note.	
    	
     	
 Precious metals prices 0624 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1787.61   -6.89   -0.38     25.94
  Spot Silver        38.88   -0.35   -0.89     25.99
  Spot Platinum    1780.15   16.90   +0.96      0.72
  Spot Palladium    733.97    9.94   +1.37     -8.20
  TOCOM Gold       4405.00   81.00   +1.87     18.13       128069
  TOCOM Platinum   4426.00   58.00   +1.33     -5.75        13757
  TOCOM Silver       95.60    2.50   +2.69     18.02          735
  TOCOM Palladium  1825.00  -30.00   -1.62    -12.97          460
  COMEX GOLD DEC1  1789.90    5.60   +0.31     25.93        52863
  COMEX SILVER SEP1  38.94   -0.39   -1.00     25.84         5343
  Euro/Dollar       1.4239
  Dollar/Yen         76.60
  TOCOM prices in yen per gram. Spot prices in $ per ounce.
  COMEX gold and silver contracts show the most active months

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