Gold stays near $1101 in Asia

27/01/2010 00:00 AST

Gold remained near $1100 an ounce mark in Asian trade Wednesday despite a strong dollar against most major currencies.

Spot gold was seen trading at $1100.84 an ounce at 11.30 a.m Singapore time while US gold futures for April delivery was at $1101.42 an ounce at the same time.

Analysts said retail demand from Asia and a possible US rate change could halt the dollar's recent gains and add to the precious metal's allure.

Gold advanced on speculation the dollar may slip against major currencies, boosting the metal’s appeal as an alternative asset. Silver rallied after plunging as much as 4.8 percent yesterday.

The Dollar Index, a six-currency gauge of the greenback’s value, shed 0.1 percent to 78.447 after strengthening as much as 0.6 percent yesterday.

The dollar may extend its retreat on speculation the Federal Reserve will keep interest rates near zero before a report forecast to show U.S. business activity slowed this month.

On Tuesday, spot gold ended at $1,097.25 an ounce while U.S. gold futures for February delivery closed at $1,098.30 on the COMEX division of the New York Mercantile Exchange

Among other precious metals, spot platinum was $1,527.50 per ounce, down from $1,532.50 at New York's notional close but off a three-week low of $1,497.00 hit on Tuesday.

Palladium was up 0.4 percent at $426.75 per ounce and silver rose 0.8 percent to $16.85 per ounce.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings stood at 1,111.922 tonnes as of Jan. 26, unchanged since Jan. 19.

Commodityonline