* Investors await Bank of America results
* Weakness seen in physical market
* SPDR holdings flat
(Recasts, changes dateline to LONDON from TOKYO)
By Rebekah Curtis
LONDON, Oct 16 (Reuters) - Gold prices slipped on Friday,
drifting back from this week's record highs as the dollar ticked
higher and as investors switched into stronger equities. Slow
physical demand also weighed on prices.
Spot gold <XAU=> was at $1,048.60 at 0946 GMT compared with
$1,049.85 late in New York on Thursday
Gold hit a record of $1,070.40 earlier this week, as traders
said prices were spurred higher by long positions piling up in
gold futures on a weakening dollar.
The metal is often considered as a hedge against the U.S.
currency, which is down about 7 percent against a basket of
currencies so far this year. []
But the dollar crawled up on Friday, opening a small gap on
recent multi-month lows.
"The dollar weakness has stalled temporarily so people have
used that as an excuse to take profits," said Daniel Smith, an
analyst at Standard Chartered.
"But there is quite a lot more weakness likely in the dollar
as we head into the year-end and that's going to add to the
upward pressure on gold," he said, adding that gold prices could
average at $1,140 in 2010.
U.S. gold futures for December delivery <GCZ9> fell 0.1
percent to $1,049.6 an ounce.
Investors opted for equities, which are flirting with highs
last seen before the Sept 2008 collapse of Lehman Brothers, as
major companies reported better-than-expected results, with
JPMorgan setting a high bar.
But results on Thursday from Goldman Sachs <GS.N> and
Citigroup <C.N> disappointed. [], and investors now
await earnings news from Bank of America <BAC.N> and General
Electric <GE.N>.
Goldman Sachs <GS.N> cut its commodity trading risks in the
third quarter, a sign Wall Street's top investment bank was more
cautious than some rivals in chasing prices on a weak dollar.
[]
Underlining lacklustre investor interest at the current high
price levels, gold holdings by the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, have been flat
since Oct. 7.
Its holdings stood at 1,109.314 tonnes on Thursday, the
highest since early July but still off a record high of 1,134.03
tonnes marked on June 1 and 2. []
Analysts said gold was also coming under pressure from
weakness in the physical market.
"For the fourth quarter the physical market is not great at
this stage," Standard Bank analyst Walter De Wet said, adding
that a lot of scrap material was coming into the market.
"There seems to be quite a bit of scrap coming through the
market which is adding to the resistance that gold is receiving
right now."
Among other precious metals, silver <XAG=> traded at $17.33
an ounce from $17.32, platinum <XPT=> was at $1,341.50 from
$1,348.5 and palladium <XPD=> was at $324 from $323.50.
(Editing by Keiron Henderson)
