>Asia spot gold sideways; US Bks, GM concerns

Sydney - Spot gold traded sideways in Asia Thursday, with investor concern about the health of U.S. banks and potentially looming bankruptcy for General Motors feeding risk aversion.

Prices traded between $890.10 a troy ounce and $894.45/oz, little changed on the New York close.

Gold is likely to remain underpinned as the wider market awaits publication May 4 of the U.S. bank stress tests, which are designed to give a clearer picture of banks' ability to weather a prolonged economic downturn, said Wallace Ng, chief gold dealer at Fortis in HK.

"The stress tests are very important for the market. In the meantime, gold is starting to look good technically and is likely to break the $900/oz level next week," Ng said.

"We've probably seen the short-term bottom," he added.

However, other factors, including General Motors saying it doesn't plan to make a $1 billion debt payment due June 1 are hanging over the general market, feeding risk aversion that generally benefits gold.

Technical downside support for gold is at $865/oz.

In the short-term however, investor interest in gold appears muted, with exchange-traded fund gold holdings stalling. The largest, the SPDR Gold Trust has been unchanged since April 17 at 1,105.98 metric tons after some outflows last week, worrying market bulls.

Spot platinum and palladium prices were slightly lower, but are receptive to talk of U.S. ETFs being launched in May or June. "There's some buying ahead of those launches, but no confirmation yet," said Ng.

At 0626 GMT, gold traded at $890.75/oz, up 5 cents on the New York close. Silver prices stood at $12.35/oz, up 3 cents. Platinum was down $9.00 at $1,160.00/oz, and palladium was at $229.00/oz, down $2.00.

On Tocom, benchmark gold futures were Y12 higher at Y2,821 a gram, and platinum futures were at Y3,678/gram, up Y44.

Source: COMMODITIESCONTROL