Gold below a record as oil drops (Reuters) (08-03-2011)

SINGAPORE – Gold lost gains on Tuesday going below a previous session record high due to oil prices falling. Investors though stayed jittery about unrest in North Africa and the Middle East.

Spot gold fell $2.89 an ounce to $1,427.85 an ounce by 0649 GMT, having rallied as high as $1,444.40 an ounce on Monday, a record high, as violence flared in Libya and after the downgrade of Greece’s credit rating reignited worries about euro zone sovereign debt.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, announced holdings up to 1,217.295 tons by March 7 from 1,210.621 tons on March 3, which was a 9- month low.

U.S. gold futures for April fell $6.0 an ounce to $1,428.5 an ounce after striking a record at $1,445.70 on Monday.

U.S. crude accelerated a drop toward $104 a barrel after the Kuwaiti oil minister said OPEC is in talks to increase production. Premiums in Hong Kong steadied at $1 to $1.50 to the spot London prices.

Silver was steady after rising as high as $36.70 an ounce on Monday, a 31-year peak, on the back of rising gold prices and physical demand from China.

Holdings in the world's largest silver-backed exchange-traded fund, iShare Silver Trust, rose to 10,898.14 tons by March 7, their highest since early January, from 10,794.89 tons on March 3.

Platinum and palladium showed declines in equities.

Source: Reuters