* Physical buying supports, as safe-haven buying wanes
* Persistent worries about financial industry seen
supporting
By Miho Yoshikawa
TOKYO, April 22 (Reuters) - Gold prices steadied to hover
slightly above $880 an ounce on Wednesday, supported by
physical demand that helped offset waning investor interest in
gold as a safe-haven asset.
The market continued to closely track news for an insight
into the health of the financial industry, which could once
again enhance gold's allure.
Prices fell on Tuesday, relinquishing early gains as global
share prices arrested their decline and helped ease credit
jitters that had previously heightened bullion's appeal.
Bullion has been trading below $900 since April 6, after
falling about 12 percent since late February when it topped
$1,000, which was the highest level since March 2008.
Gold <XAU=> was trading at $883.50 an ounce at 0309 GMT, up
0.1 percent compared with New York's notional close of $882.25
on Tuesday.
"Yes, I think physical demand has picked up a bit, perhaps
from the Indian side," said Adrian Koh, an analyst at Phillip
Futures.
"That's probably why we saw a bit of a run up on gold
prices over the past couple of days," he said.
The dollar weakened against the yen, shedding 0.3 percent
to 98.40 yen <JPY=> after gaining 0.8 percent on Tuesday. It
hit a six-month high of 101.45 on April 6 but has gradually
fallen since then. []
Gold imports by India, the world's largest consumer of the
precious metal, are set to grow by a quarter in April from a
year ago, the first rise since August, the head of metals
trading firm MMTC Ltd <MMTC.BO> said on Tuesday.
[]
He added that demand should strengthen ahead of festivals
later in the year.
Jewellery sales, which accounts for the bulk of India's
gold consumption, rise significantly during the festival season
from mid-August to October.
Demand for gold as an investment was taking a break,
however.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings remained unchanged at
1,105.98 tonnes as of April 21 after investor outflows early
this week reached their biggest since early September.
It still remains in sight of a record 1,127.68 tonnes,
marked on April 9. []
For details on gold holdings by the ETF listed in New York
and also co-listed on other exchanges, click on:
http://www.exchangetradedgold.com/iframes/usa.php
Gold could also come under selling pressure if stock
markets perform well.
"I think the attention now is more focused on the stock
markets and the slew of earnings reports from major companies.
So, if sentiment were to improve on that side, then we could
see more safe-haven outflows," Koh said.
However, market participants said concerns over the health
of the U.S. financial system remained.
The market is awaiting the outcome of U.S. authorities'
stress tests on banks.
U.S. Treasury Secretary Timothy Geithner said most U.S.
banks had enough capital to keep lending but a pile of bad
debts was fostering doubts about their health and slowing a
recovery. []
Japan's Nikkei average was flat on Wednesday, with Pioneer
Corp <6773.T> soaring on news that it may apply for state funds
but banking shares falling on investor caution ahead of the
outcome of the U.S bank assessments. []
PRICES
Precious metals prices at 0307 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 883.10 0.85 +0.10 0.34
Spot Silver 12.00 0.01 +0.08 6.01
Spot Platinum 1162.00 9.50 +0.82 24.68
Spot Palladium 222.50 0.50 +0.23 20.60
TOCOM Gold 2801.00 -15.00 -0.53 8.86
8524
TOCOM Platinum 3688.00 -2.00 -0.05 39.06
9363
TOCOM Silver 379.00 -3.00 -0.79 18.70
114
TOCOM Palladium 716.00 -3.00 -0.42 30.18
207
Euro/Dollar 1.2927
Dollar/Yen 98.31
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikako Mogi)
(Editing by Clarence Fernandez)
