Gold eases after records hit

Wed 04 Nov, 2009 00:12

TOKYO (Reuters) - Gold eased on Wednesday as investors took profits a day after it hit record highs despite the dollar's strength, but sentiment improved on bullion's growing status as a destination for a diversifying official reserves.

FUNDAMENTALS

* Spot gold was at $1,082 per ounce at 0000 GMT, down 0.2 percent from New York's notional close of $1,084.50. On Tuesday, spot gold hit an all-time high of $1,087.45.

* U.S. gold futures for December delivery also inched down 0.2 percent to $1,082.50 per ounce, compared to $1,084.90 an ounce on the COMEX division of NYMEX. Futures hit a record high of $1,088.50 on Tuesday.

* Gold swept to a record high despite the dollar's strength as the International Monetary Fund's 200-tonne sale of gold to India's central bank underscored gold's increasing status as an official reserve and fuelled speculation that other governments, including Beijing may be ready to diversify their reserves.

* The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings rose to 1,108.399 tons as of Nov 3, up 4.88 tons or 0.4 percent from the previous business day.

* Japanese financial markets were closed on Tuesday for a public holiday.

MARKET NEWS

* The S&P 500 and Nasdaq rose slightly on Tuesday as news of a major railroad acquisition helped sentiment, but the Dow edged lower on caution before a Federal Reserve statement on interest rates and the economy. <.N>

* The Fed announces its policy decision later on Wednesday.

* Nikkei average opened down 0.2 percent. <.T>

* The dollar steadied on Wednesday after climbing to a one-month high against a basket of major currencies the previous day when concerns about the global banking sector reignited safe-haven demand for the greenback.

* Gold market participants including banks, miners and investment funds have gathered for the London Bullion Market Association's annual conference in Edinburgh.

(Reporting by Chikako Mogi)