Gold under pressure by equities (Reuters) (09-03-2011)

SINGAPORE – Gold was under pressure from firmer equities on Wednesday although bargain hunting from jewellers and worries that violence in Libya and the Middle East could spread may support prices that have dropped from a lifetime high.

Spot gold shed $2.04 to $1,426.15 an ounce by 0706 GMT, off a record high of $1,444.40 an ounce struck on Monday, while it is expected to retrace to $1,412 per ounce based on its wave pattern and a Fibonacci retracement analysis.

U.S. gold futures for April hardly changed at $1,426.3 an ounce. They had struck a new record high at $1,445.70 on Monday.

Silver steadied below a 31-year high. Gains in ETF holdings indicated a growing interest in the metal, with the gold/silver ratio hovering below 40:1 -- the lowest since February 1998. Holdings in iShares Silver Trust rose to 10,913.32 tons by March 8, their strongest since early January.

The physical gold market saw light buying from jewellers but other consumers waited for cheaper prices. In main consumer India, domestic prices eased from its record high on Tuesday, triggering a slight pick-up in physical demand as traders sought to stock for the wedding season.

Source: Reuters