* 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 steady 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 $937.20 as of 0555 GMT, up 0.1
percent from New York's notional close of $936.35 on Thursday,
when it fell about $2.
At the current level, it is poised to rise 2.7 percent on the
week. That would mark the precious metal's biggest weekly
percentage gain since late May.
"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's physical demand 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 yen rose broadly on Friday, sending higher-yielding
currencies lower, as Japanese exporters sold foreign currency and
as explosions in hotels in Jakarta and caution before more U.S.
bank earnings hurt risk appetite. []
U.S. gold futures for August delivery <GCQ9> rose 0.2 percent
to $937.4 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 3 yen to 2,835 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 0553 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 937.30 0.95 +0.10 6.49
Spot Silver 13.28 0.01 +0.08 17.31
Spot Platinum 1168.00 7.50 +0.65 25.32
Spot Palladium 245.00 -0.50 -0.20 32.79
TOCOM Gold 2834.00 -4.00 -0.14 10.14 20944
TOCOM Platinum 3536.00 21.00 +0.60 33.33 9414
TOCOM Silver 400.10 0.00 +0.00 25.31 267
TOCOM Palladium 746.00 -6.00 -0.80 35.64 72
Euro/Dollar 1.4127
Dollar/Yen 93.69
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 Miho Yoshikawa, Editing by Chris
Gallagher)
