Commodity Online
SINGAPORE : Gold prices eased in early Asian trade Monday after topping $1000 last week despite investors flock to the metal amid tumbling share prices.

Spot gold was at $990.85 an ounce in Asian trade, down 0.6% from New York's notional close on Friday, as stock markets rallied on a report that the US government could take as much as a 40% stake in Citigroup.

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On Friday it hit $1005.40, just 2.5% below the all-time high of $1030.80 an ounce set in March last year.

Exchange traded funds allow easy access to gold holdings via a stock exchange-listed fund, and are a key gauge of investor interest in the metal.

The world's largest gold-backed ETF, SPDR Gold Trust, said holdings were 1028.98 tones as of February 22, level with the record high of late last week.

Further evidence of the gold market's strength came from data showing that speculative gold players boosted their net long positions to 165,921 lots on gold futures traded on Comex at February 17, up from 163,622 a week earlier.

The main pressure on gold comes from falling consumer and industrial demand, which could cause prices to fall back from their recent highs.

World Gold Council data last week showed that in 2008 jewellery demand fell 11% in tonnage terms while industrial demand also fell 7% on reduced spending on items such as laptops and mobile phones.

Also, export volumes of gold jewellery from Italy, a major world exporter, are set to fall in the first half of 2009 as the economic downturn hit consumer demand across the globe.

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