* Gold rallies, heads back towards $1,110 per ounce
* SPDR Gold holdings steady at 1,120.514 tonnes
By Miho Yoshikawa
TOKYO, Dec 18 (Reuters) - Gold prices firmed towards $1,110
per ounce on Friday as the dollar remained under pressure,
recovering some ground lost in the previous session when it fell
3 percent.
Bullion slipped below the key level of $1,100 per ounce on
Thursday, hitting a six-week low of $1,094.50.
Gold has lost some of its appeal, which lifted it to a record
high of $1,226.10 on Dec. 3, due to a stronger dollar that makes
the precious metal more expensive for holders of other
currencies.
It is down about 10 percent from the all-time peak.
Investec Bank (Australia) Ltd said in a research report that
it expected gold to fall further this year.
"The latest U.S. economic readings spurred some unwinding of
safe-haven gold buying and helped lift the dollar," it said.
"We have already suggested that investors may be setting up
for portfolio readjustments heading into the new year, and still
believe we could see gold tumble considerably further before the
year is done," it said.
Spot gold <XAU=> was at $1,106.40 per ounce at 0635 GMT, up
0.8 percent from New York's notional close of $1,097.80. It rose
as high as $1,108.70
Gold is now trading about 10 percent below a record high of
$1,226.10 hit on Dec. 3.
Some market participants remained bullish about gold saying
the precious metal was likely to bounce back next year.
"I think we are seeing an adjustment as we head towards the
end of the year," said Masayo Kondo, president of Fisco Commodity
Ltd in Tokyo.
"I think this offers a good buying opportunity."
Kondo said there were still doubts about the state of the
U.S. financial system, which meant gold still had a role to play
as a safe-haven investment next year.
He noted that U.S. regulators last week closed three more
banks, bringing the number of bank failures so far this year to
133. []
Community and regional banks have been failing at the highest
annual level since 1992.
U.S. gold futures for February delivery <GCG0> were largely
unchanged at $1,107.6 an ounce on the COMEX division of the
NYMEX, after earlier rising as high as $1,110.0.
Futures hit a record high $1,227.50 on Dec. 3.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings held steady at 1,120.514
tonnes as of Dec. 17. []
Gold retail sale volumes in Dubai were stagnant in November
and the first half of December as high prices coupled with the
emirate's debt problems made consumers more cautious abut
spending, traders said on Thursday. []
PRICES
Precious metals prices at 0634 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1106.75 8.95 +0.82 25.75
Spot Silver 17.25 0.12 +0.70 52.39
Spot Platinum 1432.00 11.00 +0.77 53.65
Spot Palladium 360.50 1.50 +0.42 95.39
TOCOM Gold 3202.00 -72.00 -2.20 24.45 92291
TOCOM Platinum 4143.00 -46.00 -1.10 56.22 11558
TOCOM Silver 501.60 -8.40 -1.65 57.09 468
TOCOM Palladium 1043.00 -24.00 -2.25 89.64 180
Euro/Dollar 1.4382
Dollar/Yen 89.62
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Miho Yoshikawa; Editing by Michael Watson)
