* Money flows watched as Sept begins after lacklustre Aug
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Risa Maeda
TOKYO, Sept 1 (Reuters) - Gold edged back above $950 an ounce
on Tuesday, after dropping 0.5 percent the previous day on
selling by short-term investors due to caution in the face of
tumbling Chinese equities and a fall in oil prices.
But investor nerves were largely soothed on Tuesday as
Chinese stock markets showed signs of stability, with Hong Kong's
Hang Seng Index <> rising 0.6 percent, and oil prices gaining
ground, traders said.
Spot gold <XAU=> was at $951.20 an ounce at 0339 GMT, up 0.2
percent from New York's notional close of $949.65, but off a
three-week high of $961.00 marked on Aug. 28.
In August, gold was mostly caught in a narrow range, falling
0.4 percent.
U.S. gold futures for December delivery <GCZ9> were flat at
$953.50 an ounce after falling $5.30 on the COMEX division of the
New York Mercantile Exchange on Monday.
"Gold is rebounding after hitting a low of $944-$945
yesterday... Asia is quiet as things are pretty mild today," said
a bullion trader in Hong Kong, referring to the firmness in
regional stock markets and oil prices.
U.S. crude oil futures <CLc1> clawed above $70 per barrel on
Tuesday a day after falling 4 percent, as Chinese stocks
recovered their poise following manufacturing sector data that
suggested China's economic recovery was on track. []
As the end of a summer holiday period nears, the financial
markets are looking for the next theme to trade with, and the
most recent focus was on Monday's sell-off in Chinese equities
amid caution over optimism about the pace of economic recovery.
Gold at that time took a hit together with other commodities,
given that the precious metal's ceiling around $960 proved solid
last week.
Another excuse to sell bullion on Monday was a weekend report
that Chinese state-owned companies will be allowed to walk away
from loss-making commodity derivative trades with six foreign
banks, traders said. [] []
But there is a lack of understanding in the markets about
what is at risk. Whether China's economy as a whole is at risk
due to heavy losses at state-owned companies is yet to be seen.
No real action by foreign banks has been detected so far in
the markets, the bullion trader said.
Also, Monday's mild gains in silver and palladium suggested
that investors were not so risk averse as at times when they flee
from any financial assets but cash, traders said.
Silver <XAG=> and palladium <XPD=> are, in general, less
resilient than gold, which is seen as a safe-haven asset, when
investors' risk tolerance falls sharply.
"People are being extra careful and watching if there is a
new trend in money flows as the month of September starts," said
Naomi Suzuki, a senior analyst at SC Asset Management Co.
"I think such nervousness is is helping make people take
notice of that report," she said, referring to the weekend report
on commodity derivatives trades in China.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings stood at 1,061.83 tonnes on
Monday, unchanged since Aug. 25. []
Precious metals prices at 0343 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 952.10 2.45 +0.26 8.17
Spot Silver 14.83 -0.06 -0.40 31.01
Spot Platinum 1244.00 7.00 +0.57 33.48
Spot Palladium 289.50 1.00 +0.35 56.91
TOCOM Gold 2861.00 1.00 +0.03 11.19 26624
TOCOM Platinum 3734.00 14.00 +0.38 40.80 7800
TOCOM Silver 445.30 7.80 +1.78 39.46 165
TOCOM Palladium 874.00 10.00 +1.16 58.91 254
Euro/Dollar 1.4354
Dollar/Yen 93.12
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
