Gold on gains after 1-month low (Reuters) (16-03-2011)

SINGAPORE – Gold strengthened again on Wednesday after a 1-month loss in the previous session, but declines in ETF holdings to their lowest in 10 months suggested that speculators could still sell bullion to raise liquidity if equities reversed gains.

Spot gold added $6.05 an ounce to $1,400 an ounce by 0657 GMT (2:57 a.m. ET), having fallen as low as $1,380.90 an ounce on Tuesday, its weakest since mid-February. Gold was trading below the 25-day moving average around $1,403.

Premiums for gold bars in Hong Kong were offered from as little as 90 cents to the spot London prices to as high as $1.70, reflecting an illiquid market.

U.S. gold futures for April rose $8.8 an ounce to $1,401.6 an ounce while the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell further to 1,212.745 tonnes by March 15, their lowest since May of last year, from 1,213.655 tonnes on March 14.

Silver steadied, having dropped to its lowest level since late February on Tuesday and Platinum failed to sustain an early rebound and slipped to its weakest since December on worries the crisis in Japan could affect demand in auto catalytic converters. Sister metal palladium also gave up early gains.

Brent crude rose $1 toward $110 after Bahraini security forces attempted to clear protesters on Wednesday, rebounding from a three-week low near $107 earlier in the day.

Source: Reuters