Weaker-than-expected U.S. housing sales and durable goods orders on Friday drove U.S. stocks lower, and world and European stocks followed that trend on Monday.

Leaders of the Group of 20 rich and developing nations pledged on Friday to bring the global economy back into balance but their statement contained few surprises and investors are already looking ahead to U.S. employment data at the end of this week.

Global equities and other higher risk assets have risen sharply in the last six months on growing optimism about the economic outlook, but markets are starting to run out of impetus, analysts say.

“Investors are a little bit reluctant to add to their risk positions,” said Koen De Leus, economist at KBC Securities.

“The market is going to have a very good look at macroeconomic numbers this week. If some of these figures disappoint, then the market is going to go down further.”

Analysts are starting to question whether the global recovery is V-shaped, or if it could be W-shaped, with a second dip to come.

The MSCI world equity index <.MIWD00000PUS> was down 0.52 percent at 282.94, bringing losses since Sept 22 to 3 percent.

U.S. stock index futures , however, were indicating a slightly stronger open on Wall Street after the market scored a third consecutive day of losses on Friday.

The FTSEurofirst 300 index <.FTEU3> hit its lowest in nearly three weeks before trimming losses to 982.53, down 0.14 percent from the U.S. close.

GERMAN STOCKS UP

German stocks <.GDAXI>, however, rose 1.3 percent with particularly strong gains in utilities E.ON and RWE , on expectations of longer lifetimes for German nuclear power plants as a result of the German election.

German Chancellor Angela Merkel’s conservatives won a weekend parliamentary election with the pro-business Free Democrats (FDPP), enabling her to end her awkward four-year-old partnership with the Social Democrats (SPD).

“(This) government provides the greatest opportunities for equity market-friendly reforms compared to other party combinations,” said Tammo Greetfeld, equity strategist at Unicredit, in a client note.

The yen, typically regarded as a safe-haven currency, surged to an eight-month high against the dollar as Japanese officials waved off any plans to stem the currency’s rise.

The yen later gave up some gains as Finance Minister Hirohisa Fujii changed gear on his comments during the course of the day, saying yen gains were becoming one-sided just hours after saying the rise was “not abnormal”.

The dollar fell as far as 88.26 yen before trimming losses to 89.35, down 0.31 percent.

However, the dollar hit a 2-1/2 week high against an index of currencies <.DXY> and a 13-day high against the euro as the U.S. currency also attracted safe-haven flows.

Funds are starting to shift money home ahead of the quarter-end later this week, analysts say.

Crude oil dipped 20 cents to $65.82 a barrel .

Euro zone government bonds also benefited from safety trades, with 10-year yields briefly hitting a one-month low.

December Bund futures were up 5 ticks, trimming earlier gains.

Sept 28 (Reuters)

That prompted investors to shun risk and weighed on U.S. stock futures. The euro also pared gains versus the dollar after the report.

The U.S. economy contracted at a 1.0 percent rate in the second quarter, according to government data on Friday. Analysts polled by Reuters had forecast GDP falling at a 1.5 percent rate.

Despite the fact GDP fell less than expected, investors focused on the consumer spending component, which showed a 1.2 percent drop after a 0.6 percent rise the previous quarter.

Consumer spending accounts for over two-thirds of U.S. economic activity.

“The better-than-expected number seems to be offset by a renewed decline in consumer spending,” said Ashraf Laidi, chief market strategist at CMC Markets in London.

“This report has written all over it the continued divergence between consumers and businesses. Consumers are still struggling. I don’t expect this to be a big boost for risk appetite.”

In early New York trading, the dollar fell 0.2 percent against the yen at 95.28 yen compared with 95.75 before the GDP report.

The euro was at $1.4112, up 0.3 percent on the day, but was down from $1.4135 before the data.

NEW YORK, July 31 (Reuters)

U.S. data showed the number of U.S. workers filing new claims for jobless benefits rose slightly more than expected last week, but a gauge of underlying labor trends fell for a fifth straight week.

Spot gold was bid at $933.50 an ounce at 1311 GMT, against $929.00 an ounce late in New York on Wednesday. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange rose $6.20 to $933.40 an ounce.

“If this is welcomed by the equities market and triggers a fresh boost, that could benefit gold,” said CMC Markets strategist Ashraf Laidi.

The dollar was down 0.39 percent at 79.3 against a basket of currencies and was lower against the euro following the data. Traders are now eyeing U.S. data on second-quarter GDP due on Friday for clues as to the next direction of the economy.

European shares rose as investors digested a raft of broadly positive corporate earnings, while U.S. stock futures extended gains after the jobs report.

Oil was also boosted by stock markets and rose above $64 a barrel. Firmer crude prices can support gold, which can be used as a hedge against oil-led inflation.

Gold demand in India, the world’s biggest bullion consumer, is recovering after recent price falls, but a further decline will be needed for buying to significantly recover.

“There are advance orders in decent quantities in the range of $900-920 an ounce,” said one dealer with a state-run bank.

Overall demand in India remains weak, however. The country’s gold imports have reached a provisional 8-10 tonnes in July so far, well below the 24 tonnes recorded last June, the Bombay Bullion Association said.

INVESTMENT SOFT

Investment demand for gold remained soft, however, as ETF holdings slipped further. Holdings of the largest bullion ETF, the SPDR Gold Trust, fell over 10 tonnes on Wednesday, and are down nearly 48 tonnes in the last four weeks.

Jason Toussaint, managing director for exchange-traded gold with the World Gold Council, said there was evidence investors were selling out of the SPDR fund to buy shares.

Analysts fear a broader liquidation of ETF gold holdings resulting from a recovery in risk appetite could jeopardise gold’s gains.

“Without strong physical demand to absorb metal coming back into the market and with funds cutting long exposure, the metal is at risk of a deeper correction,” said TheBullionDesk.com analyst James Moore.

On the supply side, the world’s largest gold producer, Barrick Gold , said it produced 1.87 million ounces of gold in the second quarter and is on track to meet its 2009 output target of 7.2-7.6 million ounces.

Among other precious metals, silver tracked gold up to $13.44 an ounce against $13.28. Spot platinum was at $1,177 an ounce against $1,170, while spot palladium was at $255 against $252.50

LONDON, July 30 (Reuters)

Spot gold was bid at $912.50 an ounce at 1417 GMT, against $908.45 an ounce late in New York on Wednesday. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange rose $3.50 to $912.80 an ounce.

Gold sold off on Wednesday in line with other commodities, slipping to an eight-week low, after the U.S. Commodity Futures Trading Commission said it was considering a clampdown on excessive speculation in commodities.

Afshin Nabavi, head of trading at MKS Finance in Geneva, said the slip was met with some light physical buying in the Far East and Europe.

“We saw some small demand out of the Far East this morning,” he said. “But India and the Middle East is still very quiet.”

“Also, the U.S. dollar is a bit weaker today,” he added.

The dollar gave back some of the previous session’s gains on Thursday as equities firmed in Europe and U.S. stock futures rose, denting interest in the currency as a haven from risk.

A recovery in stock markets after a five-day losing streak, gains in industrial commodities such as oil and base metals and a less cautious tone to currency markets suggested recent sessions’ heavy risk aversion may be abating.

Oil’s tick higher also helped support gold, which can be bought as a hedge against oil-led inflation.

Demand for gold investment products such as exchange-traded funds — a major support of prices earlier in the year amid volatility in other markets — remained sluggish, however.

Holdings of the world’s largest gold ETF, the SPDR Gold Trust , declined more than 10 tonnes on Wednesday, while those of ETF Securities’ ETFS Physical Gold product slipped 12,500 ounces 0.4 percent.

OUTPUT FALLS

In supply news, South Africa, the world’s third largest gold miner after China and the United States, said its output of the metal fell 10.5 percent in May from a year ago.

Among other precious metals, platinum was at $1,104.50 an ounce against $1,096, while palladium was at $235 against $231.50. Both metals are primarily used in car manufacturing as a component in catalytic converters.

Traders of palladium in particular were cheering news from China that its passenger car sales rose 47.7 percent in June from a year earlier.

Chinese cars are usually petrol-fuelled, meaning they use a higher proportion of palladium than platinum, which is a primary component in diesel catalysts.

Dealers say as palladium is still relatively expensive, it is unlikely to immediately post significant new gains, although platinum has met some interest.

“Even though there is very little obvious buying taking place right now, platinum is still managing to hold its head above $1,100,” said one analyst, adding strong turnover in Shanghai suggests good Chinese buying at these levels.

Elsewhere silver was at $12.85 an ounce against $12.84.

LONDON, July 9 (Reuters)

Hello! Everyone! How nice it is to be with you again today! We’ll start out with a recap of yesterday… When I signed off the airwaves yesterday morning, the dollar was having its way with the currencies, and the euro was about to give up the 1.39 handle… Apparently, 1.39 proved to be a strong line of resistance, and the euro actually moved higher on the day.

Yes, the bias to sell dollars was there, just not very strong or committed to selling dollars… And in the overnight markets, the bias to sell dollars has remained, but again, not a very strong bias… But a bias nonetheless! Which is a good sign to me, because U.S. stock futures are down this morning, which would normally mean, risk assets, like currencies, are going to have a tough row to hoe today… But, not so, at least while I’m writing the Pfennig!

Could the nascent bias to sell dollars be a result of the fact that the U.S. will once again depend on the ignorance of strangers (foreigners) and issue $35 Billion in 3-year notes today… But then, with the “new” way the Treasury allocates “who buys” the Treasuries, the Fed could step in, buy up a HUGE Chunk, and make it look like “outsiders” bought them, which would make the “deficits don’t matter” flag wavers run into the streets shouting to the tune of Jimmy Crack Corn… We issue Debt, and the foreigners don’t care, we issue lots of debt, and the foreigners don’t care…

I told you yesterday about the sizes of the Treasury issuances that had happened, and are scheduled to take place… If that doesn’t scare the bejeebers out of dollar bulls, then I don’t know what will!

Oh! Maybe this will! Yesterday, I told you my opinion on the Chinese moves recently… 1. Calling for a replacement reserve currency… 2. Calling for the use of SDR’s… 3. signing currency swap agreements with countries… I said that the use of SDR’s was a stalking horse for China’s plan to gain wider acceptance for the renminbi… Which in turn, would set the renminbi up for an alternative world reserve currency…

Now, China won’t admit to this… As the Big Boss Frank Trotter mentioned yesterday in our brief conversation, “China thinks in centuries”…

Well, in this case, I believe China will move faster than that, and faster than most observers think they will… I think this will all take place within the next 3-years… And why do I say that? Do you remember when I told you a couple of months ago, that China has “shortened” their Treasury maturities? Yes, China had, under the dark of night, quietly shifted out of long-dated Treasuries, to ones with an avg. maturity of 3-years!

At the time, we thought, that China just didn’t want 30-year paper, for in 30-years, the U.S. fiscal situation will be very dire, unless something changes drastically, given the baby boomers and their draw on entitlement programs. But now… Maybe the Chinese shortened their maturities to line up with their big plan to gain wider acceptance for the renminbi!

And don’t forget those currency swap agreements they’ve signed with countries in Southeast Asia, and Argentina… (it’s rumored that Brazil is close to signing one too!) As they spread those currency swap agreements around the world, they remove the dollar from the settlement, and replace it with renminbi, folks… I read a story that was talking about trade, and never put these things together, but that’s OK, because the data on trade was good… The story reported that these currency swap agreements could total 1/2 of China’s total exports, which is equal to about $2 Trillion in annual trade flows! If they do that each year, within 3-years they would have one of the top 3 currencies in global trade!

And… Don’t forget the fact that they have effectively removed the dollar from those trade settlements!

So… Folks… I do believe the writing is on the wall here… And Yes, the dollar will have its fun from time to time, enjoying rallies… But they will be short-lived, as the die is cast on this folks… I do believe so…

So, what does this mean for us? OK, first of all, this is just my opinion on what’s going on, there are no “guarantees” this will happen this way! So, let’s not run out into the streets shouting doing out best Chicken Little! Let’s just calmly move to the exits, in an orderly fashion… If you get my drift there…

OK, let’s talk about something else, eh? Oh! How about the Reserve Bank of Australia’s (RBA) meeting last night? Yeah, that’ll work! The RBA left rates unchanged (as I suspected they would), and the accompanying statement was a strong endorsement for maintaining the RBA’s easing bias (as I suspected they would do!). It’s like a young couple that know they are in love, but are too scared to admit it… The RBA knows they are finished cutting rates, they are just too scared to admit it! For all this talk of China’s trade, with support their export side, and once again drive the Chinese economy… As long as China is in good shape, the Aussie exports will be in good shape, and if the Aussie exports are in good shape, the RBA won’t cut rates, and all this should lead to a stronger A$! Notice I said “should”!

I get emails from time to time telling me how wrong I was about something, and that’s fine, when I’m wrong I’m wrong, there’s no two ways about it! But, I always say… I was only speaking from a fundamentals standpoint, and the fundamentals said something “should” happen… Or, like I said the other day… “The markets always do what their supposed to do, just not “when”!

Oh, and how about this to brighten your day! Moody’s announced last night that they are placing Brazil’s rating on review for a possible upgrade! Now when was the last time we heard the word upgrade used? (and not the Beyonce’ commercial for direct TV!) I’m talking About a country here! Brazil! Part of the BRIC’s that are putting so much pressure on the dollar these days!

And then there was this… Recall how I told you that the President had given me the feeling that there was more stimulus on the way for the U.S. economy? Well… Now we have a Presidential advisor making that feeling even stronger! Laura D’Andrea Tyson, a Presidential economic advisor said yesterday, “We should be planning, on a contingency basis, for a second round of stimulus.”

Oh Great, just great! NOT! For you and I know all too well, that when the Government starts planning something, they do not do so with the thought of “scrapping” the whole idea! More stimulus will mean more deficit spending, which means more Treasury issuance… I can hear the foreigners saying… No Mas! No Mas!

I read a story yesterday, (thanks Ann!) about Big Ben Bernanke, and his upcoming reappointment… Most observers believe that Big Ben will get reappointed for another term as Fed Chairman, but not without a fight, for Big Ben has many detractors these days, that have too many questions about how the Bank of America / Merrill Lynch thing came about, and his money supply. While there are others, that somehow think that he is a “hero” for saving the economy. Of course, all they would have to do is check with Ms Tyson as she would tell them that the economy is probably in need of more stimulus!

I’ll head to the Big Finish on that note, I don’t want to end the Pfennig with a tirade on Big Ben! All I’ll say is let’s see him remove the $1 Trillion in stimulus / money supply without pushing the economy back into a recession… Yeah, that’s the ticket! Let’s see him do that, before you give him accolades!

And looky here! While I was writing, the euro steadily climbed back above the 1.40 handle! I guess that bias to sell dollars is growing, eh?

Currencies today 7/7/09: A$ .8015, kiwi .6390, C$ .8660, euro 1.4025, sterling 1.6250, Swiss .9255, rand 7.9550, krone 6.4590, SEK 7.80, forint 194.20, zloty 3.1150, koruna 18.4375, yen 95.30, sing 1.4550, HKD 7.75, INR 48.43, China 6.8328, pesos 13.20, BRL 1.9525, dollar index 80.25, Oil $64.81, 10-year 3.54%, Silver $13.31, and Gold… $927

That’s it for today… Starting today, and going through next Monday, I have a ton of doctor’s appointments, scans, blood tests, you name it… It must be a new quarter on the Calendar! OH BOY! It’s not THAT bad… And as long as they show I’m still clean, and in good health, then I’m all for them! I had a reader send me a note, and tell me that I should change the “my little buddy, Alex” to something else, as Alex is now 14! HA! When he’s bigger than me, I’ll stop calling him that! HA! No… I guess I should change… Just not ready! OK… Writing from home today, I have a doctor’s appt. first thing this morning, and then off to work! It looks like another beautiful day outside, so tell yourself… This is going to be a Terrific Tuesday!

Source: $35 Billion More Treasuries To Auction

Standard & Poor’s/Case Shiller 20-city home price index fell 0.6 percent in April, after a 2.2 percent decline the month before. Economists expected an April drop of 1.8 percent

“It’s a little better than expected, but not much. On a top to bottom basis, home prices are down 30 plus percent, which underscores the amount that home prices have to climb to get to normal territory,” said Dan Greenhaus, an analyst at Miller Tabak & Co in New York.

“While they’re better than expected in the short term, in the larger sense the housing market remains under great pressure.”

On this last day of the quarter, fund managers often enhance portfolios as part of “window dressing” by selling losing stocks and scooping up the winners. The process can add to volatility.

Analysts noted the shortened week could lead to thinner volumes and increased volatility. U.S. markets will be shut for the U.S. Independence Day holiday on Friday.

S&P 500 futures rose 2.20 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futuresgained 29 points, and Nasdaq 100 futures added 2.75 of a point.

The S&P 500 is up 16.2 percent so far this quarter, putting it on track for its best period since the fourth quarter of 1998, when the index jumped nearly 21 percent. The S&P 500 has gained 37 percent since hitting a 12-year closing low in early March as early signs of an economic rebound surfaced.

NEW YORK, June 30 (Reuters)

The greenback pared some of its earlier gains as stock markets in Europe gained ground and U.S. stock futures pointed to a higher opening on Wall Street .

Analysts said currency movements would remain subdued ahead of U.S. payrolls data and European Central Bank (ECB) and Sweden’s Riksbank comments expected later this week, while some said that the dollar may eke out some gains.

“There is some position squaring … Normally the week before payrolls numbers investors tend to be defensively positioned and right now being defensive means to be long dollar,” said Geoffrey Yu, FX strategist at UBS in London.

The market will pay close attention to U.S. payrolls figures, due on Thursday, for any signs of improvement in the economy’s health. According to a Reuters poll, forecasts are for a reading of -363,000 in June compared to -345,000 in May.

By 1035 GMT, the dollar index was essentially flat at 79.922. The euro slipped 0.1 percent to $1.4033, having touched the day’s low of around $1.3984 earlier in the day. The dollar was up 0.2 percent at 95.40 yen .

H1 PERFORMANCE

The dollar has suffered broadly in the first half of 2009 as recovering stock prices has stoked demand for risk — chipping away at the U.S. currency’s safe-haven appeal — while concerns about the U.S. fiscal position has also weighed on the currency.

The dollar has struggled the most against higher-risk currencies including sterling and the Australian and New Zealand dollars, which have each gained more than 10 percent this year.

Some analysts said that market focus may turn away from risk issues in the second half, while economic fundamentals may take up more of the spotlight, which could reward currencies whose economy are seen improving in the mid-term.

“The dollar should recover in the second half if U.S. recovery expectations increase,” said Johan Javeus, chief currency strategist at SEB Merchant Banking in Stockholm.

Other analysts agreed, but said the dollar may falter if concerns grow about Washington’s debt burden as it borrows aggressively to help its economy out of recession, along with ongoing speculation about reserves diversification.

The dollar had come under pressure last week as debate intensified about the use of an alternative global currency to the greenback, with China’s central bank renewing its call last week for a super-sovereign reserve currency.

However, China said at a meeting of central bankers in Basel at the weekend that the policy governing its currency reserves, which comprise mainly U.S. Treasuries, was stable and consistent with no sudden changes, giving some respite to the dollar.

Analysts said that while the issue of diversification would likely continue, any move away from the dollar as the reserve currency of choice could take a long time to materialise.

“There will be a structural shift away from the dollar as global players begin to diversity away from dollar assets as well (but) people are so cautious on the outlook right now. No one is too sure when to pull the trigger and they’d rather err on the side of caution,” said Yu.

In a sign that the economic downturn may be easing, euro zone economic sentiment improved more than expected in June.

A survey by the European Commission showed economic sentiment in 16 countries using the euro rose to 73.3 points in June from 70.2 points in May. The data had little initial impact on the euro.

LONDON, June 29 (Reuters)

U.S. stocks have run up as much as 40 percent since early March but have drifted recently as investors looked for signs to justify earlier optimism over an economic economy that partly drove the rally.

“The focus will be on the economic data in this abbreviated week,” said Peter Cardillo, chief market economist at Avalon Partner in New York. “What we are going to see is a market that is going to respond to the economic data, numbers that should continue to indicate improvement ”

The main focus later this week will be the June jobs report set for Thursday instead of Friday, when U.S. markets will be closed due to the U.S. Independence Day holiday.

Other key economic data will include the Conference Board’s June consumer confidence report and the Chicago Purchasing Managers Index of June business activity in the U.S. Midwest, both due Tuesday, as well as the Institute for Supply Management June reading on manufacturing set for Wednesday.

S&P 500 futures rose 3.40 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futuresgained 40 points, and Nasdaq 100 futures added 8 points.

Cardillo noted the market may also be affected by end-of-quarter “window dressing” as portfolio managers sell stocks with big losses and buy some of the quarter’s best-performing issues to help improve their returns, a process that can add to volatility.

Shares of State Street Corp slid 2.6 percent to $47.05 in premarket trade after the company said it received a Wells Notice from the Securities and Exchange Commission regarding some active fixed-income strategies. The company said the agency may bring a civil enforcement action related to possible violations of the securities laws.

Oil companies face tough time ahead as refining margins will remain weak for the next five years, with tighter environmental regulations sucking profits, the International Energy Agency said Monday.

Also, the IEA executive director said in an interview he remains very concerned that too rapid an oil price rise could derail any economic recovery.

Oil jumped more than 1 percent to nearly $70 per barrel after falling late last week.

Consulting firms Towers Perrin Forster & Crosby and Watson Wyatt Worldwide Inc said Sunday they plan to merge in an all-stock deal valued at about $3.5 billion in hopes of cutting costs amid an economic slump that has caused clients to curb discretionary spending.

Shares in Watson Wyatt fell 0.6 percent to $40.95 before the bell.

With corporate earnings and economic data calendars virtually free of any market-moving events on Monday, the sentencing of confessed swindler Bernard Madoff will be in the spotlight.

At a court hearing due to begin at 10 a.m. EDT (1400 GMT), U.S. District Judge Denny Chin is expected by legal observers to sentence Madoff, 71, to what would effectively be a life term in prison.

Big-cap technology company Microsoft Corp rose 0.9 percent before the bell to $23.55. Deutsche Bank raised its price target on the stock to $30 from $22.

NEW YORK, June 29 (Reuters)

Gold slipped on Wednesday as investors cashed in profits after the precious metal hit a three-month high earlier this week, with a recovery in stock markets indicating the beginnings of a revival in risk appetite.

Spot gold was quoted at $892.10/894.10 an ounce at 1510 GMT, down from $897.35 late on Tuesday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange dipped $6.80 to $892.70 an ounce.

Gold has been well supported by investors’ fears over systemic risk and the outlook for the economy, which sent the metal to a three-month high on Monday. But signs are emerging that this risk aversion is ebbing, prompting some profit taking.

“Technically, the daily charts are overbought and warrant profit taking after a relentless rally over the fag-end of last week,” said Pradeep Unni, senior analyst at Richcomm Global Services.

Moves in the dollar versus the euro, which usually push gold in the opposite direction, are currently being trumped by the perception of risk.

The euro rose against the dollar on Wednesday as risk aversion cooled, pressuring gold, while investors awaited the end of a meeting of Federal Reserve rate setters.

While headline interest rates are unlikely to change from their current level of zero to 0.25 percent, investors will be looking for further news on U.S. quantitative easing and details of a proposed “bad bank” to take over toxic banking assets.

European shares also ticked up for the third consecutive day, with banks leading the market higher.

U.S. stock futures also rose on optimism the new Obama administration will move quickly to stabilize the ailing banking sector.

“In the last days the gold price was moving higher despite the stronger dollar,” Eugen Weinberg, an analyst at Commerzbank, said. “The risk aversion of the market participants was playing a huge role.”

“Right now, the European equity markets — another indicator of risk aversion — are friendlier and are showing some recovery. In this case, you are not looking for a safe haven.”

Oil prices, typically another key external driver of gold, were steady at just below $42 a barrel.

Fears over the outlook for the economy and growing systemic risk are currently playing a greater role in the direction of gold than its usual drivers, oil and currencies, analysts said.

SPDR SOARS

The 7 percent rise in the SPDR Gold Trust’s bullion holdings this year is widely attributed to safe haven buying.

The trust, an exchange-traded fund which issues securities backed by physical stocks of bullion, has seen interest soar as investors seek out physical gold.

However, jewelery demand remains depressed as prices hold near $900 an ounce, particularly in key global centres such as India, China and the Middle East.

“Jewelers are not comfortable buying at such high prices,” said Harshad Ajmera, proprietor of Kolkata bullion dealer JJ Gold House.

Among other precious metals, silver prices were little changed at $12.02/12.08 an ounce from $12.01.

The iShares Silver Trust , the world’s biggest silver-backed ETF, said its bullion holdings rose more than 110 tonnes on Tuesday to a record 7,453.15 tonnes, and are up more than 300 tonnes in the first two days of the week.

“What we tend to see between gold and silver prices is that initially people will opt for gold as a safe-haven asset, but if gold prices rally too far, the cheaper option is to buy silver instead,” said Barclays Capital analyst Suki Cooper.

Platinum and palladium firmed a touch. Spot platinum was at $950/958 an ounce against $945, while spot palladium was at $189/194 from $188.50.

A Reuters precious metals survey of 56 analysts showed most believe platinum prices will remain depressed this year as an expected small supply dip fails to balance falling demand from major consumers carmakers.

LONDON, Jan 28 (Reuters)

Global shares weakened on Monday and the dollar fell broadly, weighed by signs of a deepening recession in Japan and the euro zone and concerns about the banking sector around the world.

China’s interest rate cut — the fifth move since September — failed to boost stocks as data showed the deepest plunge on record in euro zone industrial new orders and a record annual fall in Japanese exports in November. Ireland’s weekend announcement that it would take stakes in its three main banks for 5.5 billion euros further underlined the global scope of the worst financial crisis in 80 years.

“One thing you can say for sure is that there has been no Christmas rally,” said Philip Isherwood, strategist at Dresdner Kleinwort.

“The macro outlook is savage. And we want earnings season out of the way. We know it’s going to be bad.”

The MSCI world equity index fell 0.15 percent.

The index rallied last week, rising 20 percent since November 21, when it hit the 5-1/2 year low. It is still on track for its first monthly gain in December after six successive months of losses.

“People can’t see where the turnaround is going to come from — the one piece of good news is that most of the bad news has been discounted,” said Justin Urquhart Stewart, investment director at Seven Investment Management.

The FTSEurofirst 300 index of leading European shares fell 1.4 percent, led by falls in banks such as BNP Paribas . Emerging stocks fell 1.6 percent.

U.S. stock futures were pointing to a slightly firmer open on Wall Street.

EURO AND EASING

The euro rose 0.4 percent to $1.4123. It was up over 1 percent against the dollar at one point as investors grew worried about the economic impact of the U.S. car industry’s expected restructuring. The U.S. government moved on Friday to throw its automakers a $17.4 billion lifeline.

The euro’s trade-weighted exchange rate is up more than 7 percent this month.

“Europe will ultimately need some effective easing one way or another. And the tightening we have seen ultimately is likely to add to the downward pressure on European growth and inflation, and the upward pressure on European bonds,” Goldman Sachs said in a note to clients.

Against a basket of major currencies, the greenback ticked lower, on track for its biggest monthly loss since 1985.

Oil prices rose 0.5 percent to $42.59 a barrel after OPEC producers promised to keep to the cartel’s agreement to cut back production.

The March bund futures were up 42 ticks.

Natsuko Waki, Reuters 12/22/08