Gold advances in Asia as euro gains

SINGAPORE, Mar 10 (Commodity Online): Gold prices showed signs of recovery in Asian trade Wednesday after the euro bounced slightly higher against the dollar.

Gold for immediate delivery was seen trading at $1,122.00 an ounce at 11.30 am Singapore time after hitting as low as $1,108.55 an ounce, its weakest since February 26.

US gold futures for April delivery was little changed at $1,122.6 an ounce at the same time.

The euro edged up against the dollar, trading just above $1.3600. The common currency had come under fresh pressure after Fitch ratings agency said it still has a negative outlook on Portugal's credit rating.

US crude futures extended declines Wednesday from an eight-week high after industry data showed a sharp build in US crude inventories. In theory, weaker oil prices reduce gold's appeal as a hedge against inflation.

Gold was around 2 per cent below a 6-1/2-week high near $1,150 hit in early March. Several attempts to revisit a lifetime high around $1,200 struck in early December were met by heavy profit taking but steady investor interest could lend support.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust said its holdings stood at 1,116.120 tonnes as of March 9, unchanged from the previous business day, but up from 1,111.556 in early March.

On Tuesday, gold finished with a slight loss after its was pressured early in the New York session by a muscular dollar and by comments from a Chinese official seen as a hint that gold purchases from the country might not be as robust as some might have expected.

Lightly traded but nearby March gold settled down $1.60, or 0.14 per cent, to $1122 an ounce on the Comex division of the New York Mercantile Exchange. Most-active April closed down $1.70, or 0.15 per cent, to $1122.30.

Silver for May delivery rose 6.6 cents to settle at $17.338 an ounce. Copper for May delivery rose 0.01 cent to settle at $3.4115 per pound.