PRECIOUS-Gold off 4-week lows as dollar dip supports

                                
 * Gold sees support near $1,070, resistance around $1,170
                                
 * Dubai statement positive for gold, albeit in short term
                                
 * SPDR gold holdings steady
                                
 By Chikako Mogi
                                
 TOKYO, Dec 14 (Reuters) - Gold prices rose and moved away
from four-week lows on Monday as the dollar reversed course and
dipped against a basket of major currencies, paring gains made
after upbeat U.S. economic data late last week.
                                
 Volume remained light with Christmas and year-end holidays
approaching, and the market was seen likely to face more
liquidations by investors looking to close or lighten positions
after this year's rally to record highs.
                                
 Gold was also aided by increasing risk tolerance after Dubai
said on Monday it had received $10 billion from Abu Dhabi to help
it repay $4.1 billion in an Islamic bond maturing on Monday. That
also boosted the euro versus the dollar. [ID:nLDE5BD01A]
                                
 Ashraf Laidi, London-based chief market strategist of online
trading firm CMC Markets, said it was positive news and would
give a short-term boost to gold.
                                
 "Gold may be going back to $1,100 or $1,150, maybe $1,160,
but I don't think this news is going to lead to any longer
retreat in gold. I think the FOMC could be the force that may
help gold sustain or go back up toward $1,190 or $1,200 if they
really make no change on the statement," said Laidi.
                                
 The Federal Reserve will hold a policy-setting meeting on
Tuesday and Wednesday and is expected to repeat a pledge to keep
interest rates extraordinarily low for an extended period even as
it acknowledges signs of economic healing. [ID:nN13200680]
                                
 Expectations for U.S. interest rates to remain low for a long
period were one key factor weighing on the dollar and supporting
gold, as excess money found its way into the yellow metal as a
means to protect against a devaluing currency.
                                
 Spot gold <XAU=> rose 1.1 percent to $1,125.80 per ounce as
of 0605 GMT, compared to New York's notional close of $1,113.85.
                                
 Bullion was trading more than $100 below its record high
$1,226.10 reached on Dec. 3 but up about 27 percent from the
start of the year.
                                
 U.S. gold futures for February delivery <GCG0> gained 0.7
percent to $1,127.70 per ounce, compared to $1,119.90 an ounce on
the COMEX division of NYMEX. Futures were also off more than $100
from the record high of $1,227.50 hit on Dec. 3.
                                
 But traders and analysts said after gold reached near $1,300
per ounce earlier this month, up nearly 40 percent from the start
of the year, that investors had become wary of the market's rapid
pace of rises and elevated price levels.
                                
 "As gold had raced up ahead of other commodities, it is also
likely the first to undergo a correction. The market has not
rebounded strongly and funds' long positions have not been
liquidated fully. Gold is expected to face corrective
pre-Christmas selling this week," said Hiroyuki Kikukawa, general
manager in the market research department at Nihon Unicom.
                                
 He said spot gold was likely to be supported around $1,070
and capped near $1,170 in the near term.
                                
 Spot gold hit a four-week low of $1,109.10 on Friday as
better-than-expected U.S. retail sales data boosted hopes for a
self-sustaining economic recovery and bolstered the dollar,
sending gold investors racing to cut positions. [ID:nN11254372]
                                
 Noncommercial net long U.S. gold futures positions fell to
254,429 lots in the week to Dec. 8 from 259,064 lots, a weekly
report by the U.S. Commodity Futures Trading Commission showed.
[ID:nN11147207]
                                
 As an indication of a slowdown in gold investment, holdings
at the world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, remained steady at 1,116.247 tonnes as of Dec.
11. [GOL/SPDR]
                                
 The euro was up 0.4 percent on the day at $1.4670 <EUR=>,
helped by a jump in the euro against the yen. The low-yielding
yen benefited the most when concerns about Dubai's debt problems
hit financial markets in November. [USD/]
                                
 PRICES
 Precious metals prices at 0151 GMT
 Metal             Last    Change  Pct chg  YTD pct chg  Turnover
 Spot Gold        1126.80   12.95   +1.16     28.02
 Spot Silver        17.33    0.22   +1.29     53.09
 Spot Platinum    1432.00    6.00   +0.42     53.65
 Spot Palladium    362.50    5.00   +1.40     96.48
 TOCOM Gold       3227.00  -37.00   -1.13     25.42        98650
 TOCOM Platinum   4106.00   19.00   +0.46     54.83        13183
 TOCOM Silver      498.40   -3.10   -0.62     56.09          257
 TOCOM Palladium  1050.00    9.00   +0.86     90.91          236
 Euro/Dollar       1.4678
 Dollar/Yen         88.72
 TOCOM prices in yen per gram, except TOCOM silver which is
 priced in yen per 10 grams. Spot prices in $ per ounce.
 (Additional reporting by Nopporn Wong-Anan in Singapore and Risa
Maeda in Tokyo; Editing by Michael Watson)