*Gold preference stays; heavy long positions cap topside
*SPDR gold holdings <XAUEXT-NYS-TT> up 1.2 tonnes on Monday
By Risa Maeda
TOKYO, Sept 15 (Reuters) - Gold prices steadied at around
$1,000 per ounce on Tuesday after retreating from an 18-month
high marked late last week, underpinned by a shift towards the
metal from currencies.
Gold fell 0.6 percent on Monday, marking the biggest
percentage fall in three weeks.
But its recent push above $1,000, reflecting a shift by
investors away from volatility in currencies, has now brought
gold's trading range to $980-$1,030, a factor limiting the
downside, traders said.
The market has been consolidating on a round of
profit-taking, said Louis Lok, a senior dealer at Bank of China.
"But I think the $1,000-$1,005 level is good support. I'll
have to wait-and-see," he added.
Spot gold <XAU=> was almost flat at $998.85 per ounce as of
0326 GMT, compared to New York's notional close of $998.65 and a
Monday low of $992.90.
It hit $1,011.55 on Friday, its highest since March 2008.
U.S. gold futures for December delivery <GCZ9> edged down to
$1,000.50 per ounce. On Monday, the contract fell $5.30 to
$1,001.10 on the COMEX division of the New York Mercantile
Exchange, retreating further from a Friday high of 1,013.70, its
highest since Feb. 20.
Traders say there has been a shift towards gold from
currencies, which has coincided with dollar vulnerability. (For
related story, click: [])
Gold's resilience differs from earlier this year when gold
rose on a slump in the dollar versus the euro, said Kaname Gokon,
deputy general manager at Okato Shoji Co's research section.
"Gold looks like it will stay strong as there is a general
preference for the precious metal. But in order to gain a further
momentum, we first have to deal with a heavy pile of long U.S.
futures positions," he said.
"The market is going to find it difficult to move away from
this heavy burden limiting the upside, unless gold retreats to
$980 or so," he said.
Previously, gold was mostly traded between $930-$970 and
formed a sideways triangle pattern for months. The break of that
technical pattern when gold rallied beyond $1,000 has invited
heavy fresh longs in U.S. gold futures.
In contrast, money inflows into gold-backed securities
remained slow.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings rose by 1.221 tonnes to
1,078.851 tonnes on Monday, marking their first rise since Sept.
3. []
Precious metals prices at 0338 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 998.75 0.10 +0.01 13.47
Spot Silver 16.60 0.09 +0.55 46.64
Spot Platinum 1306.00 -7.50 -0.57 40.13
Spot Palladium 291.00 0.00 +0.00 57.72
TOCOM Gold 2939.00 20.00 +0.69 14.22 22774
TOCOM Platinum 3838.00 54.00 +1.43 44.72 7180
TOCOM Silver 486.10 9.00 +1.89 52.24 451
TOCOM Palladium 858.00 13.00 +1.54 56.00 114
Euro/Dollar 1.4614
Dollar/Yen 91.14
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Edwina Gibbs)
