* Lack of physical buying above $940/oz caps topside
* SPDR gold holdings <XAUEXT-NYS-TT> inch higher
By Risa Maeda
TOKYO, July 17 (Reuters) - Gold prices were almost flat on
Friday after dipping the previous day when weak U.S.
manufacturing data revived risk aversion and lifted the dollar,
dulling the precious metal's allure as an alternative asset.
Bullion has recently been underpinned by optimism about the
economic outlook and hit a two-week high of $941.95 an ounce on
Wednesday. But further buying failed to emerge, with investors
keeping an eye on the course of the dollar, economic data and
corporate earnings.
Spot gold <XAU=> stood at $936.70 as of 0333 GMT, slightly
higher than New York's notional close of $936.35 on Thursday,
when it fell about $2.
It is poised to rise 2.7 percent on the week if it stays at
the current level. That would mark the precious metal's biggest
weekly percentage gain in almost two months.
"There are no aggressive buyers who dare to buy at a level
above $940, and this is setting the market's tone right now,"
said Kaname Gokon, deputy general manager at Okato Shoji Co.
"But after seeing a rally led by powerful buying from the
gold ETF recently, few people want to test the downside, either.
There are physical needs to buy gold and sell the dollar when
gold is at $920-$930," he said.
The dollar hit a six-week low against a basket of major
currencies <.DXY> on Thursday, but later rebounded after data
showed factory activity in the U.S. mid-Atlantic region
contracted for a 10th straight month in July. []
[]
The dollar hovered near that low on Friday, with investors
cautiously awaiting earnings reports from banks for signs of
recovery in the sector. []
U.S. gold futures for August delivery <GCQ9> rose $1.4 or 0.2
percent to $936.80 an ounce. The contract settled down $4 at
$935.40 on the COMEX division of the New York Mercantile Exchange
on Thursday.
Light selling in Tokyo gold futures, triggered by a firmer
yen versus the dollar, was also helping to cap bullion's topside.
The benchmark Tokyo Commodity Exchange gold futures for June
delivery <0#JAU:> fell 9 yen to 2,829 yen per gram.
Investors here often sell to factor a stronger yen into the
yen-based futures prices on TOCOM, a market that typically tracks
dollar-based gold prices.
The TOCOM market will be closed on Monday for a public
holiday.
Some traders said the market has already hit a summer lull
and settled into range-bound trade.
"Overall, the dominant situation right now is summer holiday.
It is also a quiet season (on the manufacturing side). There is
not so much demand in the market," said Dick Poon, manager of
precious metals at Heraeus Ltd.
"The market is consolidating. A resistance level sits at
around $950," he added.
Holdings by the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, rose to 1,094.85 tonnes on
Thursday, up 0.31 tonnes from the previous business day.
[]
It was the first rise after falling for six straight weeks
from a record of 1,134.03 tonnes hit on June 1.
Precious metals prices at 0340
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 936.50 0.15 +0.02 6.40
Spot Silver 13.27 0.00 +0.00 17.23
Spot Platinum 1160.50 0.00 +0.00 24.52
Spot Palladium 244.50 -1.00 -0.41 32.52
TOCOM Gold 2829.00 -9.00 -0.32 9.95 17985
TOCOM Platinum 3511.00 -4.00 -0.11 32.39 7468
TOCOM Silver 399.00 -1.10 -0.27 24.96 255
TOCOM Palladium 750.00 -2.00 -0.27 36.36 55
Euro/Dollar 1.4118
Dollar/Yen 93.62
(Editing by Chris Gallagher)
