* Dollar slide halts for now, keeping buyers sidelined
* U.S. data watched for dollar direction
* SPDR holdings <XAUEXT-NYS-TT> up on Wednesday
(Updates throughout, previous TOKYO)
By Veronica Brown
LONDON, Oct 1 (Reuters) - Gold was marginally softer on
Thursday, weighed as the dollar arrested its fall, but prices
held on above key support at $1,000 with investors content to
stay sidelined ahead of U.S. manufacturing and housing data.
Spot gold stood at $1,005.30 per ounce at 1036 GMT, compared
with $1,006.70 late in New York on Wednesday.
U.S. gold futures for December delivery <GCZ9> fell $2.00 to
$1,007.00, after rising 1.5 percent on Wednesday.
In other precious metals, silver was flat at $16.59 <XAG=>,
while platinum fell to $1,290.50 from $1,295.50 <XPT=> and
palladium eased to $292.50 from $293.50 <XPD=>.
"Gold picked up reasonably strongly yesterday on dollar
concerns, but that doesn't seem to have had much of impact today
-- there's a bit of a holding of breath to see what happens next
with the data due out today," said David Wilson, metals analyst
at SocGen in London.
Analysts said that with currency movements seen as the main
driver, major direction should come in the wake of dollar
reaction to U.S. consumption data at 1230 GMT, plus
manufacturing data and pending home sales figures at 1400 GMT.
Data showing a pick up in consumption could see the dollar
sold as investors gain confidence about picking up riskier
assets. A weaker dollar would make dollar-priced gold cheaper
for non-U.S. investors. The dollar was last up 0.4 percent
against a basket of major currencies.
UNEASE
Dollar weakness, concerns about potential inflation and
technical momentum saw gold prices rise some 8.7 percent in the
three months to September, producing its strongest performance
since the first quarter of 2008.
The latest rally also took prices to within a few dollar's
of the March 2008 record high at $1,030.80.
HSBC metals analyst James Steel said in a note to clients
that the market's ability to stay at or near $1,000 was
impressive.
"During previous penetrations of $1,000/oz, gold prices
corrected significantly and remained well below $1,000/oz
for months afterwards," Steel said.
"We believe the deterioration of the USD combined with a
gradual increase in investor risk appetite, is propelling gold
prices higher. Gold appears poised to challenge all-time highs of
USD1,030/oz."
But while investors have been happy to go with current
momentum, some unease remains over the market's fundamental
picture and the extent of speculative long positioning.
"To me this rally seems to be a little artificial. There's
been a lot of speculative interest but it's difficult to see
what the key driver is," SocGen's Wilson said.
"Macro-wise I can't see any significant reasons supporting
gold. The data seems to still suggest that we're in quite a
significant deflationary environment," he added.
On investment, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust, said its holdings
rose 1.22 tonnes to 1,095.327 tonnes on Wednesday. []
It was the first rise since Sept. 21, when the holdings rose
by 15.256 tonnes to top 1,100 tonnes on a fall in gold prices to
around $995 per ounce.
(Additional reporting by Risa Maeda in Tokyo; editing by James
Jukwey)
