* Gold ticks down as physical dealers sell
* ETF holdings hit a record, buoys sentiment
* Dollar weakness supports prices
(Updates prices, adds details)
By Sambit Mohanty
SINGAPORE, March 20 (Reuters) - Gold crept down on Friday
as dealers in China and Southeast Asia booked profits, taking
advantage of bullion's rise to a near three-week high a day
earlier, but a holiday in Japan may keep volumes thin.
As the dollar heads for its biggest weekly fall in 24 years
and holdings of the largest gold-backed exchange-traded fund
hit a record, traders said sentiment remained strong as
investors scrambled for safe-haven assets.
"Some physical selling from China and Southeast Asia came
in this morning," said a Hong Kong-based trader. "They found
the price close to $960 a good level to sell a few positions."
Another trader echoed gold's safe-harbour allure at a time
of wavering risk appetite, saying: "People are still not
confident about investing in stocks. They have nowhere to go."
Spot gold <XAU=> was trading at $956.30 an ounce by 0540
GMT, down from New York's notional close of $958.60. Earlier in
the day, it was down as much as 1 percent. On Thursday, gold
hit $961.50 an ounce, its loftiest level since Feb. 27.
Gold is down 5 percent from its 11-month high above $1,000
struck in February after investors booked profits and sales of
scraps intensified as holders sold back jewellery and coins for
cash. It hit a record of $1,030.80 last March.
Bullion rose 3 percent this week, largely supported by the
weakening dollar after the Fed said it planned to buy
long-dated U.S. Treasuries along with U.S. mortgage and agency
debt in a big way, the central bank's most aggressive purchase
since the early 1960s. []
Reflecting gold's continued popularity, the SPDR Gold Trust
<GLD> said its holdings rose to a record 1,103.29 tonnes by
March 19, up 18.96 tonnes, or 1.7 percent, from the previous
day. []
For a graphic on the SPDR holdings, click:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD200309.jpg
"The ETF trend -- successive records and that too very
frequently -- is a clear indication that sentiment is strong
and will remain strong in the near term," said another Hong
Kong-based trader.
"Some physical selling took place but gold looks like one
of the safest assets at the moment. And the dollar weakness is
a key factor."
Commodity prices rallied this week, with the
Reuters-Jefferies CRB index <.CRB>, a global commodities
benchmark, touching a five-week high Thursday, as the softer
dollar made them cheaper for overseas buyers, while others
looked for a hedge against potential inflation. []
Investors, fearing the Fed's plans to buy government debt
would cheapen the world's reserve currency, had sent the dollar
down more than 5 percent against a basket of major currencies
<.DXY>.
"The underlying bullish outlook remains firmly intact with
the past four weeks' major corrective phase now fully confirmed
to be complete," global brokerage Newedge said in a report.
"Expect values to head back towards the February peaks in and
around the $1,005-$1,010 zone in the days and weeks ahead."
The U.S. dollar index was pinned at 83.135, having fallen
as far as 82.631 on Thursday, the lowest in 10 weeks. The euro
<EUR=> was at $1.3655, having climbed to a peak of $1.3737 in
New York, the highest since Jan. 8. []
U.S. gold futures for April delivery <GCJ9> were down $1.30
from the previous settlement of $958.80 an ounce on the COMEX
division of the New York Mercantile Exchange.
Precious metals prices at 0602 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 957.30 -1.30 -0.14 8.77
Spot Silver 13.63 0.06 +0.44 20.41
Spot Platinum 1115.00 -7.50 -0.67 19.64
Spot Palladium 205.00 1.50 +0.74 11.11
Euro/Dollar 1.3656
Spot prices in $ per ounce.
(Editing by Ben Tan)
