PRECIOUS-Gold steadies below $1,000; palladium ETF jumps

                                
 * Gold consolidates last week's gain --last at $993.60/oz
                                
 * SPDR Gold holdings <XAUEXT-NYS-TT> down 0.04 percent
                                
 * ETF securities palladium EFT hits record high
                                
 
                                
 (Recasts with fresh quotes, prices, changes dateline, byline
PVS TOKYO)
                                
 By Veronica Brown
                                
 LONDON, Sept 7 (Reuters) - Gold held broadly steady on
Monday just shy of $995 per ounce, consolidating stellar gains
last week that took it tantalisingly close to the $1,000
psychological level, with buyers encouraged by dollar weakness.
                                
 Investment in palladium continued to jump -- sending prices
close to highs for the year -- with fund holdings swelling on
expectations for depressed auto demand to pick up.
                                
 Spot gold <XAU=> stood at $993.60 per ounce by 1030 GMT,
broadly steady from $993.40 quoted late in New York last Friday.
                                
 The price rose as far as $997.20 last week -- its highest
since February, when it topped $1,000.
                                
 While the gold price found support at lower levels, trading
ranges were narrow and volumes were said to be thinner, with
investors restraining themselves due to a U.S. public holiday.
                                
 A confluence of dollar weakness -- making the metal more
attractive to non-U.S. investors -- and doubt about the
sustainability of global economic recovery prompted a spate of
investors to seek refuge in gold last week, as prices hit
six-month highs.
                                
 "It (higher gold price) certainly reflects some uncertainty
and, along with that the short-term factors such as the US
dollar," Daniel Wills, senior analyst with ETF securities told
Reuters Television.
                                
 "It also seems to reflect ongoing uncertainty in terms of
the likely impact from all the quantitative easing out there, in
terms of how that flows through from money supply and into
inflation," he added.
                                
 The Group of 20 finance ministers and central bankers said
over the weekend they would not remove economic stimulus until
the global recovery was well entrenched. [ID:nL5327479]
                                
 While some analysts have argued the case for buying gold as
a hedge against the potential inflation when central banks try
to navigate away from quantitative easing, others are less
convinced.
                                
 "I don't buy the argument about inflation concerns, it seems
to be far too far-fetched at the moment when we're still looking
at a deflationary environment," said David Wilson, director of
metals research at SocGen in London.
                                
 
                                
 PALLADIUM INTEREST SURGES
                                
 In Asia, dealers said physical markets saw selling from
holders, with demand from India slowing to a trickle as
jewellers sought to buy on dips during the festive season in the
world's largest consumer.<GOL/AS>.
                                
 U.S. gold futures for December delivery <GCZ9> were at
$995.20 per ounce, after settling at $996.70 on Friday.
                                
 On currency markets, the dollar and yen lost ground on
Monday, while the euro rose and the Australian dollar hit its
strongest level in a year as shares gained following the G20
pledge to keep economic supports in place. [USD/]
                                
 In a sign of possible falling investor interest, the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
<GLD>, said its holdings fell 0.38 tonnes to 1,077.63 tonnes on
Friday. [GOL/SPDR]
                                
 Palladium flows painted a different picture, with the amount
of metal ETF Securities holds to back its palladium
exchange-traded commodity rising by more than 43,000 ounces or
10.7 percent to a record high on Sep 4. [ID:nL7582762]
                                
 Analysts said fund flows had been encouraged by speculation
that incentive schemes for new car purchase schemes might be
extended, helping to revive depressed auto sector demand for the
metal.
                                
 Spot palladium stood at $291.00 per ounce <XPD=> compared
with $290 quoted late in New York on Friday. The market hit 2009
highs last week at $293.50.
                                
 In other precious metals, silver was bid at $16.29 <XAG=>
compared with $16.20 on Friday, while platinum <XPT=> rose to
$1,256.00 from $1,252.50 on Friday.
                                
 South Africa's miners' union said on Monday it would try to
persuade strikers at Impala Platinum to return to work, while
fresh talks at Anglo Platinum were due to start at 0800 GMT in a
bid to agree a pay deal. [ID:nL7574269]
                                
 (Additional reporting by Miho Yoshikawa in Tokyo and Jane
Grieve in London; Editing by Sue Thomas)