* Gold buoyed by expectations of further dollar weakness
* SPDR holdings dip
* Crude edges up
By Rebekah Curtis
LONDON, Sept 25 (Reuters) - Gold edged up on Friday as the
dollar retreated from its previous day's rally, and as cautious
investors eyed the Group of 20 meeting for indications on how
global economic recovery could progress.
Spot gold <XAU=> rose to $996.95 an ounce at 0949 GMT,
compared with $993.75 late in New York on Wednesday. It earlier
flirted with a 2-week low of $990.20, a level it touched on
Thursday when the dollar rallied. []
"Markets had a lot of surprises yesterday so I think today
we're going to be playing it more cautiously," said Afshin
Nabavi, head of trading at MKS Finance. "The market overall
looks good. We're seeing little bit more demand coming in this
morning."
Analysts said gold was being underpinned by expectations of
further dollar weakness.
The U.S. currency slipped on Friday after a draft communique
from the G20 in Pittsburg said economic stimulus measures would
remain in place for now, suggesting that interest rates,
including those in the United States, would remain low.
For more on the G20 summit, click on: []
"Expectations for ongoing dollar weakness are likely to
generate further investor buying in gold on a worldwide basis,"
said John Meyer, analyst at Fairfax investment bank.
"As confidence returns to markets the dollar, which was seen
as a safe haven, is likely to fall," he said, adding that a
decline in the dollar was likely to be gradual.
A weaker dollar makes commodities priced in the U.S.
currency cheaper for holders of other currencies.
CRUDE GAINS
Light gains in crude <CLc1> prices also provided a little
support for gold, which is used as a hedge against inflation.
Inflation is often triggered by rising oil prices.
Some analysts said gold would draw support from resilient
demand in the physical market in Asia.
India's gold purchases have picked up as the festival season
gathers pace in the world's largest consumer.
But the world's largest gold-backed exchange-traded fund,
the SPDR Gold Trust <GLD>, said its holdings fell to 1,094.107
tonnes as of Sept. 24, down 0.7 percent from 1,101.735 tonnes
the previous business day. <XAUEXT-NYS-TT>
Among other precious metals, silver <XAG=> was bid at $16.24
from $16.18, platinum was at $1,293.5 from $1,297.5 and
palladium at $293 from $291.5.
"For most of the precious metals investor inflows have been
very strong," said Dan Smith, analyst at Standard Charted.
"It suggests to us gold is going to remain resilient. Our
advice is you should be long in gold and platinum and short in
some of the base metals."
(Editing by Keiron Henderson)
