* Spot gold up 0.8 percent at $920.15 per ounce <XAU=>
* Bullion takes support from dlr weakness, steadying shares
* ETF holdings stable; $885-$930 range eyed
(Adds quotes, updates prices)
By Veronica Brown
LONDON, May 12 (Reuters) - Gold lengthened early gains on
Tuesday, reflecting some discomfort with a rally in so-called
riskier assets, with dollar weakness helping to prop up the
metal's appeal as an alternative investment.
Spot gold stood at $920.15 per troy ounce by 1230 GMT <XAU=>
compared with $912.60 quoted late in New York on Monday. It hit
its highest since April 2 earlier this month at $925.15.
Bullion found support as the U.S. currency retreated against
a basket of major currencies <.DXY>, making dollar-priced gold
cheaper for non-U.S. buyers as investors latched on to the
traditional dollar-gold inverse correlation.
The rally in bullion -- often used as a hedge against market
uncertainty and seen sometimes as a barometer of investor
attitudes toward risk -- also came as oil and stock markets rose
in the hope that the global economic slump may have bottomed out
[].
World shares, measured by MSCI's all-country index, steadied
after hitting a six-month high on Monday <.MIWD00000PUS>. Oil
moved to its highest this year <CLc1>.
Analysts have said gold prices are trapped between opposing
forces as its role as a hedge against economic uncertainty vies
with perceptions that the economic downturn might be moderating.
"There's a lot of uncertainty still even though we have seen
'green shoots' rallies in equities, but is that the start of a
recovery or a bounce in an otherwise bear trend? This is the
great unknown," said James Moore, analyst at TheBullionDesk.com.
"We've still got a little way further to go before we have a
clear idea on things," he added.
Simon Weeks, director of precious metals sales at Scotia
Mocatta in London, also said the market had benefitted as
markets try to work out whether the downturn has moderated but
saw gold stuck in familiar territory during that process.
"I wouldn't expect us to break out of the broader $885-930
range at the moment -- in a thin market like this when the
dollar is weak then people look for gold to move higher," he
added.
ETF HOLDINGS STABLE
U.S. gold futures for June delivery <GCM9> were buoyant,
rising $8.90 to $922.40 after settling down $1.40 on Monday on
the COMEX division of the New York Mercantile Exchange.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings stood at 1,104.09 tonnes as
of May 11, unchanged from the previous business day. []
In other precious metals, silver stood at $14.22 an ounce
<XAG=> from $13.91 late in New York on Monday, while platinum
<XPT=> rose to $1,131.00 from $1,114.50 and palladium <XPD=> was
at $235.00 from $233.50.
Earlier in Asian trading hours, traders were cautious as the
Tokyo Commodity Exchange, Japan's biggest commodity futures
exchange, suspended trading of all contracts due to system
trouble. []
It was the first glitch since the exchange launched a new
trading platform on May 7, which saw it extend trading hours and
introduce a circuit breaker system in an attempt to lure back
investors and restore the market's shrinking liquidity.
The exchange is investigating the cause of the problem. It
opened for evening trade at 0800 GMT.
(Additional reporting by Risa Maeda in Tokyo; editing by Sue
Thomas)
