* Gold correcting from run-up that began in Sept, eyes dlr
* SPDR Gold holdings fall 1.22 tonnes on Wed []
By Risa Maeda
TOKYO, Oct 29 (Reuters) - Gold prices steadied around $1,030
per ounce on Thursday, pausing their decline for now after
earlier hitting a new three-week low of $1,025.75, but rises were
capped by a recovery in the dollar.
An extended fall in higher-yielding currencies as well as in
stocks, partly reflecting fears over the pace of economic
recovery, suggested investors had kept unwinding growth-linked
trades that had been in vogue in recent months.
"A run-up in gold after the Labour Day holiday (on Sept. 7)
has been way overdone," said Kaname Gokon, deputy general manager
in the research section of Japanese commodity broker Okato Shoji
Co.
"That needs to be corrected until a floor is found at
$990-$1,000," Gokon said, referring to the level bullion stood at
in the second week of September.
That floor could be touched before U.S. monthly job report
data due early next month, he added.
The precious metal had been taking buying cues from
fast-growing optimism over economic recovery, which fuelled
inflation concerns. A steadily declining dollar also increases
the allure of the precious metal as an alternative asset.
Spot gold <XAU=> edged up to $1,031.60 by 0643 GMT, up 0.5
percent from New York's notional close of $1,026.85.
Technically the $1,025-$1,030 level has been considered as a
short-term floor as it provided a long-standing ceiling that gold
passed through earlier this month.
Bullion was down more than 3 percent from a record high above
$1,070 hit on Oct. 14.
U.S. gold futures for December delivery <GCZ9> traded at
$1,032.10 per ounce after falling $4.90, or 0.5 percent, to
$1,030.50 on Wednesday.
In the foreign exchange market, the dollar held firm near its
highest in more than two weeks against a basket of currencies
<.DXY>, pulling further away from a 14-month low marked on Oct.
21. []
Kazuhiko Saito, chief analyst at Tokyo's Fujitomi Co, said
falling share prices on growing worries about the global economy
have diminished inflation pressures, while moves by some central
banks, even though limited, to tighten monetary policy suggest a
subtle change in the availability of funds to markets including
gold.
"Gold's rally has likely come to an end as these factors have
been helping to drive prices higher," he said. "As for the
safe-haven aspect of gold, I wonder how many physical buyers
would be convinced that $1,000 is good value for safety."
He expects the market to test the $1,000 support in the near
term.
Investor appetite for bullion stayed low, with the world's
largest gold-backed exchange-traded fund reporting a third
consecutive daily outflow. []
SPDR Gold Trust <GLD> said its holdings stood at 1,104.434
tonnes as of Oct. 28, down 1.22 tonnes or 0.1 percent from the
previous business day and bringing the total decline this week to
3.66 tonnes.
Among other precious metals, spot silver <XAG=> rose to
$16.21 per ounce, off a new three-week low of $16.08 marked
earlier on Thursday. Platinum <XPT=> clawed above $1,300 to
$1,308.50 per ounce after touching a new three-week low of
$1,297.00 on Wednesday.
Precious metals prices at 0648 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1031.55 4.70 +0.46 17.20
Spot Silver 16.22 0.13 +0.81 43.29
Spot Platinum 1310.50 7.00 +0.54 40.61
Spot Palladium 315.50 2.00 +0.64 71.00
TOCOM Gold 3012.00 -51.00 -1.67 17.06 84432
TOCOM Platinum 3829.00 -50.00 -1.29 44.38 16724
TOCOM Silver 472.70 -16.80 -3.43 48.04 864
TOCOM Palladium 917.00 -44.00 -4.58 66.73 719
Euro/Dollar 1.4706
Dollar/Yen 90.42
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 Michael Watson)
