Gold steadies led by physical buying in Asia (Reuters) (20-01-2011)

SINGAPORE – Spot gold prices steadied on Thursday, leaving back three consecutive days of gains with extending physical buying in Asia. Sentiment was supported by data from China showing a higher-than- expected inflation number.

Any decline in holdings in physically backed exchange-traded funds marked a shift in investor interest from gold and silver to riskier assets such as stocks amid a brighter economic outlook. 

Spot gold lost $2.25 at $1,367.8 an ounce by 0551 GMT and is heading towards $1,349, as a minor rebound has been completed at Wednesday's high of $1,378.81. U.S. gold edged down 0.2 percent at $1,3676. 

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, continued to decline. It fell to 1,251.433 tonnes by Jan 19, its lowest since May 2010.          

IShares Silver Trust, the world's largest silver ETF, also pared holdings to 10,575.32 tonnes, its lowest in more than two months. Holdings in the fund had been falling continuously this month, down more than three percent so far.                  

Spot platinum inched down 0.3 percent to $1,825.24, off the 30-month high of $1,845.5 hit on Wednesday.

Spot palladium lost 0.4 percent at $808.47, after hitting $825.5 in the previous session, its highest since March 2001.

Source: Reuters