* Failure to sustain $990 could cause drop to $970 -- analyst
* SPDR Gold holdings <XAUEXT-NYS-TT> were steady
By Miho Yoshikawa
TOKYO, Sept 29 (Reuters) - Gold was mostly flat on Tuesday
trading around $990 as traders continued to look to the currency
market for direction, although investors were somewhat cautious,
saying bullion may be due for a small correction.
The precious metal rose towards $1,000 on Monday, but gave up
some gains after the dollar accelerated its advance versus the
euro <EUR=>, causing commodities to become less attractive for
non-U.S. investors.
"I am still positive on the longer-term outlook for gold. But
it's ... in a bit of a correction mode at the moment," said
Adrian Koh, an analyst at Singapore's Phillip Futures.
Gold <XAU=> was at $990.25 per ounce at 0304 GMT, up 0.03
percent against the notional close in New York of $989.95.
U.S. gold futures for December delivery <GCZ9> were at
$991.70 per ounce, down 0.2 percent.
Market analysts have said the gold market is vulnerable to
price swings and profit-taking due to a build-up in long
positions, which hit a record high last week for a third straight
week. []
Bullion rallied to an 18-month high of $1,023.85 an ounce
earlier this month, within reach of its record high of $1,030.80
struck in March 2008.
It fell below the key $1,000 mark last week on a bout of
heavy selling, prompted in part by an absence of physical buying
of gold due to near-record-high prices.
"The $990 region will have to hold for the moment for gold to
head higher. If it doesn't, we could head towards $970," Koh
said.
Bullion last fell below $970 on Sept. 2.
Some in the industry have become sceptical about prospects
for further growth in gold.
Rebounding stock markets and signs of economic growth mean
the time may have come to abandon gold, among the strongest
assets during the recent recession, National Bank of Canada
<NA.TO> said on Monday. []
The bank has been bullish on gold since 2005.
The yen briefly slipped against the dollar after Japan's
finance minister was quoted as saying currency intervention was
possible under extreme circumstances. []
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,094.107
tonnes as of Sept. 28, unchanged since Sept 24. []
Other precious metals rose, with palladium marking the
largest rise.
Spot palladium <XPD=> was at $289, up 1.05 percent from $286,
while platinum <XPT=> was at $1,274, up 0.04 percent from
$1,273.50.
PRICES
Precious metals prices at 0302 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 990.50 0.55 +0.06 12.54
Spot Silver 16.17 0.03 +0.19 42.84
Spot Platinum 1275.00 1.50 +0.12 36.80
Spot Palladium 287.00 1.00 +0.35 55.56
TOCOM Gold 2877.00 27.00 +0.95 11.82 30767
TOCOM Platinum 3696.00 34.00 +0.93 39.37 6523
TOCOM Silver 468.90 11.10 +2.42 46.85 356
TOCOM Palladium 840.00 4.00 +0.48 52.73 124
Euro/Dollar 1.4618
Dollar/Yen 89.95
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)
