* Failure to sustain $990 could cause drop to $970 -- analyst
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Miho Yoshikawa
TOKYO, Sept 29 (Reuters) - Spot gold inched up on Tuesday to
trade above $990 as the euro gained against the dollar, 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 to
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 $992.15 per ounce at 0539 GMT, up 0.2
percent against the notional close in New York of $989.95.
U.S. gold futures for December delivery <GCZ9> were at
$993.90 per ounce, down 0.02 percent.
The dollar rose against the yen <JPY=> on Tuesday after
Japan's finance minister said intervention was possible in
extreme cases, but it inched down against the euro <EUR=>.
[]
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 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 $287.50, up 0.5 percent from
$286, while platinum <XPT=> was at $1,275.50, up 0.2 percent from
$1,273.50.
PRICES
Precious metals prices at 0538 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 991.95 2.00 +0.20 12.70
Spot Silver 16.20 0.06 +0.37 43.11
Spot Platinum 1272.50 -1.00 -0.08 36.53
Spot Palladium 287.50 1.50 +0.52 55.83
TOCOM Gold 2881.00 31.00 +1.09 11.97 36688
TOCOM Platinum 3696.00 34.00 +0.93 39.37 8216
TOCOM Silver 469.50 11.70 +2.56 47.04 435
TOCOM Palladium 840.00 4.00 +0.48 52.73 147
Euro/Dollar 1.4639
Dollar/Yen 89.88
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Joseph Radford)
