* Gold in 3rd consecutive session of declines
* Gold price driven by dollar movements amid credit worries
* SPDR gold ETF <XAUEXT-NYS-TT> holdings unchanged
By Miho Yoshikawa
TOKYO, May 28 (Reuters) - Gold inched down on Thursday,
posting its third straight day of losses, as a steady dollar
dulled some of bullion's sheen, but it remained within the
previous session's range on weaker equities.
Market participants said gold was moving inversely to the
U.S. dollar, and that any bounce in the currency was likely to
weigh on the precious metal, as investors view gold as a
currency hedge.
"(Gold's direction at the moment) really depends on how the
dollar pans out, especially after the bout of selling on
concerns that the U.S. credit rating may be affected by the
large amount of debt the U.S. has," said Adrian Koh an analyst
at Phillip Futures.
Moody's Investors Service affirmed its top credit rating
for the United States on Wednesday, but warned that if the U.S.
failed to reduce current debt levels once economic growth
returns, the credit grade could eventually come under pressure.
[].
Gold <XAU=> was at $946.85 per ounce at 0306 GMT, down 0.1
percent from New York's notional close of $948.10.
U.S. gold futures for June delivery <GCM9> were at $946.70,
down 0.7 percent from settlement on the COMEX division of the
New York Mercantile Exchange.
The dollar held steady against the euro on Thursday, having
pulled up from five-month lows hit against the single European
currency last week due to short-covering. []
The dollar rose 0.4 percent against the yen to 95.69 yen
<JPY=>.
A spike in U.S. Treasury yields triggered a selloff in
equity markets on Wednesday, as investors feared rising funding
costs might delay a potential recovery in the world's largest
economy. []
Phillip Futures' Koh said he believed gold had the
potential to move higher from a technical point of view.
"I am still positive on gold should we head higher and
break above the previous highs of $960," he said.
"However, for that to happen, the $940 support will have to
hold and if it doesn't, then we may see a continuation of the
retracement in gold prices," he said.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,118.76
tonnes as of May 27, unchanged from the previous day.
[]
Gold markets appear to have largely factored in news that
General Motors Corp <GM.N> appears close to a bankruptcy
filing, which would be the largest ever for a U.S. industrial
company.
On Wednesday, GM said a bond exchange offer had failed to
win support from investors holding $27 billion of its debt.
[] []
However, the report has weighed on platinum <XPT=> and
palladium <XPD=>, which are affected by news from the auto
industry due to their heavy use as autocatalysts, needed to
clean exhaust fumes.
Precious metals prices at 0303 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 946.90 -1.20 -0.13 7.58
Spot Silver 14.64 -0.08 -0.54 29.33
Spot Platinum 1126.00 -5.50 -0.49 20.82
Spot Palladium 222.00 0.00 +0.00 20.33
TOCOM Gold 2932.00 17.00 +0.58 13.95
19463
TOCOM Platinum 3507.00 16.00 +0.46 32.24
5995
TOCOM Silver 449.00 7.70 +1.74 40.62
172
TOCOM Palladium 700.00 -11.00 -1.55 27.27
171
Euro/Dollar 1.3838
Dollar/Yen 95.91
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Miho Yoshikawa; Editing by Ben Tan)
