* Dollar steadies 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
the 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 will be
key.
"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.
The precious metal is often seen as a hedge against a
weakening dollar. A weaker greenback also makes gold and other
commodities cheaper for holders of other currencies.
Spot gold <XAU=> was at $1,055.80 per ounce at 0540 GMT, up
0.2 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, weighing on
market sentiment.
U.S. gold futures for December delivery <GCZ9> were at
$1,056.50 per ounce, down 0.2 percent, after rising 50 cents to
$1,058.60 on Tuesday.
The dollar steadied 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 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 $1,348.50 per ounce after hitting a
13-month high of $1,376 a day earlier and palladium <XPD=> was at
$334.50, off a 14-month high of $339.50.
Silver <XAG=> was at $17.44 an ounce, little changed from
$17.45 in New York.
Precious metals prices at 0540 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1055.70 1.70 +0.16 19.95
Spot Silver 17.45 0.00 +0.00 54.15
Spot Platinum 1348.00 1.00 +0.07 44.64
Spot Palladium 334.50 0.50 +0.15 81.30
TOCOM Gold 3089.00 -15.00 -0.48 20.05 29916
TOCOM Platinum 3946.00 -25.00 -0.63 48.79 9097
TOCOM Silver 509.40 -6.60 -1.28 59.54 221
TOCOM Palladium 977.00 7.00 +0.72 77.64 312
Euro/Dollar 1.4923
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.
(Additional reporting by Chikako Mogi; Editing by Joseph
Radford)
