* Dollar flat a day after recovery from 14-month lows
* SPDR Gold holdings [] unchanged since Oct 7
By Risa Maeda
TOKYO, Oct 21 (Reuters) - Cash gold steadied above $1,050 per
ounce on Wednesday after snapping back a day earlier from two
days of gains on a recovery in the dollar, with investors looking
to corporate earnings for a clue to direction.
Strong earnings from U.S. companies had helped raise
investors' risk tolerance, causing a shift in their focus from
the safe-haven dollar and U.S. Treasuries to stocks and
commodities, including gold.
But on Tuesday U.S. stocks retreated from 12-month highs and
a commodity rally hit a bump as a firmer dollar and disappointing
U.S. housing and inflation data triggered profit-taking.
"Markets are now paying close attention to U.S. earnings to
see beyond the current uncertainty in the economy ... One concern
is relatively weak earnings by the financial sector," said Yuki
Sonoda, an adviser at Daiichi Commodities Co in Tokyo, adding
that Morgan Stanely's <MS> earnings due later in the day are
among key ones to watch.
"But the basic line remains the same for gold. That is, gold
will keep gaining support from the dollar being on the defensive
for the time being," he said.
Gold is often seen as a hedge against a weakening dollar. A
weaker dollar also makes gold and other commodities cheaper for
holders of other currencies.
Spot gold <XAU=> was at $1,054.80 per ounce at 0317 GMT, up
0.1 percent from New York's notional close of $1,054.
It hit a record high above $1,070 last week. But physical
buying by the jewellery sector has disappeared, putting a cap on
further buying.
U.S. gold futures for December delivery <GCZ9> were at
$1,055.70 per ounce, down 0.3 percent, after rising 50 cents to
$1,058.60 on Tuesday.
The dollar was little changed on Wednesday after bouncing
back from a 14-month low against a basket of currencies a day
earlier on comments by policymakers in Europe and Asia on the
greenback's decline. []
There has been little evidence of buying by long-term
investors at the current high price levels.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,109.314
tonnes as of Oct. 20, unchanged since Oct. 7. []
"Investment money alone would not make gold's rally
sustainable. The other driver, demand from the jewellery sector,
fades quickly when the economy deteriorates and is among the
slowest to pick up when the economy recovers," Sonoda said.
In other precious metals, platinum and palladium both rose to
their highest in more than a year on Tuesday before retreating.
Platinum <XPT=> was at $1,349.50 per ounce after hitting a
13-month high of $1,376 a day earlier and palladium <XPD=> was at
$334, off a 14-month high of $339.50.
Silver <XAG=> was at $17.40 an ounce, down slightly from
$17.45 in New York.
Precious metals prices at 0324 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1054.35 0.35 +0.03 19.79
Spot Silver 17.39 -0.06 -0.34 53.62
Spot Platinum 1349.50 2.50 +0.19 44.80
Spot Palladium 334.00 0.00 +0.00 81.03
TOCOM Gold 3085.00 -19.00 -0.61 19.90 24386
TOCOM Platinum 3941.00 -30.00 -0.76 48.60 7302
TOCOM Silver 507.50 -8.50 -1.65 58.94 179
TOCOM Palladium 978.00 8.00 +0.82 77.82 222
Euro/Dollar 1.4914
Dollar/Yen 90.67
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Watson)
