* Gold in correction mode, may test $1,025-$1,030
* Dollar, stocks eyed ahead of U.S. payrolls data
* SPDR Gold holdings fall 1.22 tonnes on Monday []
By Risa Maeda
TOKYO, Oct 27 (Reuters) - Gold steadied above $1,040 per
ounce on Tuesday as a rally in the dollar paused, soothing
concern among investors who rushed to sell the precious metal
the previous day on a jump in the greenback from a 14-month low
versus the euro.
As of 0310 GMT, spot gold <XAU=> was up 0.4 percent at
$1,041.60 an ounce from New York's notional close of $1,037.10.
Bullion hit a low of $1,036 earlier on Tuesday, its lowest
price since Oct. 6, as it fell about 3 percent from a record
high above $1,070 hit on Oct. 14.
Gold has rallied in the last two months as the dollar
steadily weakened, making bullion cheaper for non-dollar holders
and boosting investor interest in gold as a hedge.
"A drop by 3 percent from the record high is not surprising.
It's a technical correction," said Ronald Leung, director of Lee
Cheong Gold Dealers in Hong Kong.
U.S. gold futures for December delivery <GCZ9> were almost
flat at $1,042.40 an ounce after falling $13.60 or 1.3 percent
to $1,042.80 on Monday.
In the currency market, the dollar held steady as investor
selling of stretched higher-yielding currencies and the euro
paused. []
"The market is watching the dollar," Leung said, referring
to gold's resilience at around $1,040 per ounce.
He said bullion would soon test the $1,025-$1,030 level
before making a decisive turnround.
An analyst at a Japanese trading company shared the view,
saying a fall to that level could be achieved in coming days
given the recent market trend showing that stocks fall ahead of
U.S. monthly payrolls data at the beginning of each month.
While falls in stock markets usually boost gold's safe-haven
appeal, they have recently prefered the dollar itself as a safer
place to park their money.
"In the past two months, stocks peaked out and fell before
the U.S. jobs data was out, regardless of whether the actual
data were bullish or bearish," the analyst said. "That may
happen again given uncertainty hanging over the global economy.
It's an event risk we should be prepared for," he said.
Another drag might come from a sell-off in silver, which
started its ascent before gold, buoyed by expectations that a
global economic recovery would boost demand from industrial
users, traders said.
Speculative positions in U.S. gold and silver futures both
eased from peaks but stayed at high levels. []
Underlining the weakening mood, data confirmed a further
outflow of money from the world's largest gold-backed
exchange-traded fund.
The SPDR Gold Trust <GLD> said its holdings fell 1.22 tonnes
on Monday to 1,106.874 tonnes, down about 3 tonnes from the
recent high earlier this month. []
Precious metals prices at 0306 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1041.15 4.05 +0.39 18.29
Spot Silver 17.17 0.12 +0.70 51.68
Spot Platinum 1336.00 5.50 +0.41 43.35
Spot Palladium 329.00 -0.50 -0.15 78.32
TOCOM Gold 3094.00 -34.00 -1.09 20.25 28124
TOCOM Platinum 3968.00 -39.00 -0.97 49.62 6878
TOCOM Silver 507.30 -14.60 -2.80 58.88 238
TOCOM Palladium 977.00 -14.00 -1.41 77.64 259
Euro/Dollar 1.4871
Dollar/Yen 92.08
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
