* Bullion supported on currency factors as euro trims loss
* SPDR Gold holdings <XAUEXT-NYS-TT> unchanged
* Market supported around $980/oz, spec longs cast a shadow
(Updates prices and comments)
By Humeyra Pamuk and Veronica Brown
LONDON, Sept 28 (Reuters) - Gold clawed higher on Monday
after slipping below $990 per ounce, with currency factors
dominating direction, but the market remained vulnerable to
fresh losses after speculators lightened positions last week.
Spot gold <XAU=> stood at $994.55 an ounce by 1439 GMT,
slightly up from $990.95 an ounce late in New York on Friday,
when gold hit a two-week low of $984.70 an ounce.
A bout of speculator-based selling last week took the market
sharply below the psychologically significant $1,000 mark and,
with speculators still over stretched on the New York COMEX
futures market, analysts said a stronger dollar might leave room
for fresh falls before another attempt higher.
"We will need to see ongoing good physical and ETF demand or
otherwise the weight of spec longs in the market might trigger
some disappointed long liquidation," said Simon Week, director,
precious metal sales, at Bank of Nova Scotia in London.
Dealers said physical demand was supportive for gold at the
lower levels with Asia-based operators seeing jewellery demand
pick up in India as the festive period approaches.
On the currency front the dollar fell against the yen, but
stood firm versus the euro <EUR=>. A stronger dollar makes gold
and other commodities priced in the U.S. unit less attractive
for non-U.S. investors.
But with most analysts maintaining a bearish stance on the
dollar, gold was still seen standing in good stead for another
attempt on the March 2008 record high scored at $1,030.80.
"The dollar feels like it has to go much lower from where it
is and gold could benefit from that," said Afshin Nabavi, head
of trading at MKS Finance.
COMEX STRETCHED
U.S. gold futures for December delivery <GCZ9> rose 0.4
percent to $995.80 an ounce from $991.60 on the COMEX division
of the New York Mercantile Exchange. On Friday, the contract
fell $7.30.
Bullion's failure to stay above $1,020 an ounce prompted an
unwinding of long positions on the COMEX gold futures market.
Long positions -- buying to profit from further gains -- had hit
a record high last week for a third straight week.
[] [] []
"We're seeing some long liquidation from the speculative
side of the market. The major support is at $975 an ounce,"
Nabavi said.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,094.107
tonnes on Friday, unchanged from the previous business day.
<XAUEXT-NYS-TT> []
In other precious metals, silver took a lead from the slight
rally in gold and climbed to $16.18 <XAG=> from $16.00
Platinum <XPT=> stood at $1,278 from $1,272.50 and palladium
<XPD=> was at $287.50 from $288.
(Reporting by Humeyra Pamuk, Editing by William Hardy)
