* Slump in physical demand could weigh on prices
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Miho Yoshikawa
TOKYO, Aug 21 (Reuters) - Gold held near $940 on Friday after
falling the previous session, although prices looked vulnerable
to declines in the absence of strong fundamentals.
The precious metal has mostly traded below $950 this week, at
one point falling more than 3 percent from last week's high of
$960.55.
Gold <XAU=> was at $940.15 per ounce at 0236 GMT, up 0.1
percent from the notional New York close of $939.35.
U.S. gold futures for December delivery <GCZ9> were largely
flat at $941.6 per ounce.
The absence of demand for gold jewelry, as demonstrated by
falling imports in India, is weighing on gold, traders said.
India's July gold imports fell two-thirds from a year earlier
as high prices dented demand in one of the world's top markets
where gold jewelry is often given as gifts during festival
seasons or at weddings.
"Gold is a luxury item but in this day and age money is going
where it is needed ... and a prime example of that happening is
in India," said Kazuhiko Saito, chief analyst at Tokyo's Fujitomi
Co Ltd.
Another mark of gold's declining attraction among investors
is the slump in holdings of gold-backed exchange-traded funds.
The SPDR Gold Trust <GLD>, the world's largest, said its
holdings held steady at 1,065.49 tonnes as of Aug. 20, unchanged
for almost two weeks. []
Saito said gold could also come under selling pressure in the
days ahead if news of the suspension of the U.S.' "Cash for
Clunkers" auto rebates pressures oil prices.
Gold typically moves in line with crude, as it is often
bought as a hedge against oil-led inflation.
The U.S. government said it would end the popular programme
on Monday as the plan's $3 billion budget runs dry, a month after
it was launched. []
"As it looks now, there are no strong fundamentals to support
gold prices," Saito said.
The euro slipped 0.3 percent to 133.79 yen <EURJPY=R>.
Against the dollar, the single European currency held steady
at $1.4250 <EUR=>. []
Investors remained worried about the potential for further
weakness in Chinese shares and shied away from risky investments.
Platinum <XPT=> was down 0.7 percent at $1,228 per ounce
although the metal used in jewelry and autocatalysts, could come
under upward pressure depending on developments in South Africa,
the world's top producer of the precious metal.
Impala Platinum <IMPJ.J>, the world's second-biggest platinum
producer, said on Thursday that it would seek further talks with
a South African union planning an indefinite strike next week.
[]
PRICES
Precious metals prices at 0235 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 939.80 0.45 +0.05 6.78
Spot Silver 13.85 -0.04 -0.29 22.35
Spot Platinum 1229.00 -7.50 -0.61 31.87
Spot Palladium 269.50 -2.50 -0.92 46.07
TOCOM Gold 2850.00 -28.00 -0.97 10.77 23238
TOCOM Platinum 3723.00 -70.00 -1.85 40.38 8336
TOCOM Silver 419.50 -9.40 -2.19 31.38 70
TOCOM Palladium 827.00 -8.00 -0.96 50.36 139
Euro/Dollar 1.4251
Dollar/Yen 93.92
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)
