UPDATE 2-Gold falls in Asia as dlr gains ground

UPDATE 2-Gold falls in Asia as dlr gains ground
Mon Mar 24, 2008 3:21am EDT (REUTERS)

By Risa Maeda TOKYO, March 24 (Reuters) - Cash gold fell in Asian trade on
Monday, reversing earlier gains and nearing a one-month low
touched last week below $905 as the dollar gained ground against
other major currencies.

Spot gold briefly rose above $920 an ounce, but
reversed course and slipped more than 1 percent to $907.30.

By 0708 GMT, gold was trading at $908.80/909.60, compared
with $916.60/917.40 in Asia late on Friday. Gold was trading
around $920.30/921.10 in late New York trade on Thursday before
U.S. and European markets closed for the Good Friday holiday.

In Asia, markets in Hong Kong and Australia remained closed
for Easter Monday, but markets in India and Singapore reopened.

Gold hit a record high last Monday at $1,030.80 as concerns
about deepening financial market troubles in the United States
hit the dollar and raised gold's allure as a safe-haven asset.

But the dollar has steadied against other major currencies,
helped by a series of aggressive efforts by the Federal Reserve
to ease the credit crisis.

"Investors had fled to cash and gold as fears about the
liquidity crunch heightened in the United States, but that flight
was coming to a halt given joint efforts by the Fed and the
Treasury Department," said Yuki Sonoda, adviser at Daiichi
Commodities Co, referring to the proposed takeover of troubled
U.S. investment bank Bear Stearns.

"A sell-off in all commodities late last week means that a
reversal mode has set in," he said.

On Thursday, gold bottomed at $904.65, a level last seen on
Feb. 18, as investment funds cashed in bullion to cover losses in
other financial markets.

The dollar rose 0.2 percent to 99.85 yen from late
Asian trading on Friday. The dollar hit a 13-year low of 95.77
yen on electronic trading platform EBS early last week.

The euro fell 0.5 percent to $1.5360 from around
$1.5445 in late Asian trading on Friday, slipping further from a
record high of $1.5905 struck on EBS last week.

"The market is still in a phase of adjusting overbought
positions. A further recovery in the dollar is expected to prompt
sales in gold," said Tatsuo Kageyama, analyst at Kanetsu Asset
Management in Tokyo.

"But falls in gold should be limited at around $850, where
buying from India is expected to emerge."

COMEX gold futures slid more than 1 percent in Asia. The most
active April contract GCJ8 on the COMEX division of the New
York Mercantile Exchange stood at $907.50 an ounce, compared with
Thursday's settlement of $920.

Gold futures <0#JAU:> on the Tokyo Commodity Exchange (TOCOM)
fell, with the most active February delivery dropping 2.8 percent
as far as 2,933 yen per gram -- the lowest for a benchmark since
Jan. 22.

Key TOCOM silver futures fell by their daily 40-yen limit to
555.6 yen per 10 grams.

TOCOM platinum futures <0#JPL:> for February delivery was
unchanged at 5,745 yen per gram.

Spot platinum was little changed at $1,850/1,860 an
ounce from late Asian trade on Friday.

Spot silver fell to $16.86/16.91 an ounce from around
$17.07.

Palladium edged down to $427/433 an ounce from
around $431.

(Reporting by Risa Maeda and Chikafumi Hodo)