* Dollar firmness caps gold prices
* SPDR Gold ETF holdings inch up closer to record high
By Chikako Mogi
TOKYO, Dec 30 (Reuters) - Gold prices edged down on Wednesday
after snapping a three-session winning streak the day before,
with the dollar's firmness curbing bullion's appeal as a currency
alternative.
Trading remained very subdued with many Japanese players out
of the market for new year holidays until Jan. 4.
Market players eyed the dollar, which kept the firmer tone it
has developed recently on shifting sentiment about the outlook
for U.S. rates in view of improving economic data. []
Some traders said the correction in gold prices was about to
end as dollar short-covering, which was partly responsible for
the dollar's recent rebound, was also nearly completed.
Bargain-hunting interest was expected to keep gold supported
around $1,080, traders have said.
Looking into 2010, gold is likely to recover in the first few
months due to prospects for the dollar to fail to rise
significantly, said Masayo Kondo, president of Fisco Commodity
Ltd in Tokyo.
The Federal Reserve is not expected to raise interest rates
in the first half of the year at least, and the huge U.S. budget
deficit will keep the dollar pressured while problems in housing
loan repayments will weigh on banks' financial health, he said.
"All these factors are dollar negative, which in turn
benefits gold. Gold may turn weaker towards the end of 2010
depending on economic data and views on U.S. interest rates,"
Kondo said.
A weak dollar boosts gold's appeal as an alternative asset
and makes dollar-priced commodities cheaper for holders of other
currencies.
Spot gold <XAU=> eased 0.2 percent to $1,094.80 per ounce as
of 0605 GMT compared to New York's notional close of $1,096.55
per ounce.
Spot gold had tumbled to a seven-week low of $1,074.10 an
ounce last week before the holiday break.
U.S. gold futures for February delivery <GCG0> also eased 0.2
percent to $1,095.60 an ounce, compared to $1,098.10 an ounce on
the COMEX division of the New York Mercantile Exchange.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings rose to 1,133.622 tonnes as
of Dec. 29, up 0.08 percent or 0.914 tonnes from the previous
business day. The holdings are slightly below a record high of
1,134.03 tonnes set on June 1. []
Investor sentiment remained bullish for platinum group metals
after the U.S. Securities and Exchange Commission took a step on
Dec. 22 that brought the first U.S. platinum exchange traded fund
closer to final approval. []
After falling on profit-taking on Tuesday, platinum and
palladium <XPT=> stood at $1,465 ounce against $1,462.00, while
palladium <XPD=> was at $384.50 against $385.50.
Precious metals prices at 0608 GMT
Metal Last Change Pct chg Day ago pct Turnover
Spot Gold 1095.05 -1.50 -0.14 24.42
Spot Silver 16.99 -0.09 -0.53 50.09
Spot Platinum 1467.50 5.50 +0.38 57.46
Spot Palladium 386.00 0.50 +0.13 109.21
TOCOM Gold 3258.00 -15.00 -0.46 26.62 32033
TOCOM Platinum 4374.00 2.00 +0.05 64.93 8819
TOCOM Silver 51.40 -0.70 -1.34 -83.90 218
TOCOM Palladium 1156.00 17.00 +1.49 110.18 236
Euro/Dollar 1.4328
Dollar/Yen 92.05
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Watson)
