CORRECTED - Gold Inches Higher in Asia Ahead of Easter Weekend

April 17, 2003

In TOKYO story headlined "Gold inches higher in Asia ahead of Easter weekend" please read in third paragraph ....NM Rothschild.... instead of ....NM Rotschild (adding dropped letter)

A corrected story follows.

TOKYO, April 17 (Reuters) - Weaker stocks and a fragile dollar nudged gold a touch higher in quiet Asian trade on Thursday as investors fiddled with positions ahead of the Easter weekend.

Traders said players were reluctant to place bets in a market still groping for direction after the Iraq war, even as U.S. economic worries and grim corporate earnings kept safe-haven gold in the spotlight.

"I think a lot of traders feel the risk is on the upside so they might want to go into the weekend slightly longer than short, but we haven't seen anything of significance today at all," said Martin Mayne, associate director of NM Rothschild in Sydney.

"It's been very quiet -- very little interbank activity."

Markets in New York, London, Sydney and Hong Kong will be closed on Friday to celebrate Easter, with many also closed on Monday.

Spot gold was quoted at $326.40/90 an ounce at 0522 GMT, up from $325.65/326.15 last quoted in New York.

The softer greenback lent modest support by making dollar-based bullion cheaper for buyers using other currencies. The dollar was changing hands at 119.03/05 yen by mid-afternoon, against 119.45 yen in late U.S. trade.

"The whole market is expecting the U.S. dollar to weaken, and it's beginning to position itself that way," Mayne said.

Gold has been glued in the $320-$330 range since April 3, when U.S. forces started closing in on Baghdad in their quest to topple Iraqi leader Saddam Hussein.

With that mission now accomplished, traders say it will take a big movement in the currency or equities markets to jolt the metal out of its rut.

"The focus has shifted to rebuilding Iraq and economic growth," said Gordon Cheung, director of precious metals trading at Mitsui Bussan in Hong Kong.

Gold futures: on the Tokyo Commodity Exchange drifted lower in thin trade after spending much of the day narrowly mixed.

The benchmark February 2004 contract was down two yen per gram at 1,248 by mid-afternoon. Turnover was light at under 35,000 lots.

Tael gold, which is traded on the Chinese Gold and Silver Exchange, was up HK$23 at HK$3,027. A tael is 1.2 ounces.

Gold's lethargy rubbed off on spot silver, which was unchanged at $4.48/50 an ounce.

Palladium continued its descent to fresh six-year lows in anaemic trade on a dismal demand outlook.

The metal, used mainly to curb noxious car exhaust fumes, was bid as low as $140 an ounce before creeping back to $146/152, versus $147/152 last indicated in New York.

"The market is just full of sellers," a dealer with a big Japanese trading house said, adding that lurking stop-loss orders could send palladium hurtling as low as $120.

Sister metal platinum rose to $624/629 an ounce by mid-afternoon, up from $621/626 at New York's close.

http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=2581359