* Gains capped as funds seen preparing to move away from gold
* SPDR Gold holdings up 0.304 tonnes on Monday
By Risa Maeda
TOKYO, Dec 15 (Reuters) - Gold prices held steady around
$1,125 on Tuesday as the dollar stayed weak due to improved risk
tolerance after concerns eased about Dubai's debt woes.
Investors were bracing for comments by the U.S. Federal
Reserve, which starts its two-day meeting later in the day and
which will likely repeat a pledge to keep interest rates near
zero for an extended period, even as it makes a nod to signs of
economic recovery. []
Spot gold <XAU=> stood at $1,125.90 an ounce at 0535 GMT,
almost flat from New York's notional close of $1,126.20. It hit a
four-week low of $1,109.10 on Friday.
Investors are mostly taking a wait-and-see attitude as the
impact on currencies from the Federal Open Market Committee
(FOMC) meeting remains to be seen, said Eli Owaki, an economist
at Nomura Securities Co.
"There is focus on how currencies will react after the FOMC
meeting. If the Fed's positive assessment on the economy spurs
unwinding of dollar shorts and a further return of money into
stocks, that would be negative for gold," Owaki said.
News on Monday of Abu Dhabi's surprise move to throw Dubai a
$10 billion lifeline to repay debts had cheered global equity
markets. []
But Japan's Nikkei share average <> edged down on
Tuesday and the dollar was subdued, with most markets eyeing the
Fed meeting. [] []
Gains in gold were limited like the period when prices broke
through $1,100-$1,200, which was mainly driven by buying from
fund managers that are more committed to growth investments when
they are confident in the economic outlook, Owaki said.
"Such investors must have felt shaky at $1,200-$1,300, and
they have been liquidating gold positions," she added.
Spot gold is trading about $100 below a record high of
$1,226.10 reached on Dec. 3.
U.S. gold futures for February delivery <GCG0> rose 0.2
percent to $1,126.50 an ounce. Futures were also down about $100
from their record peak of $1,227.50 hit on Dec. 3.
The Fed meeting ending on Wednesday will mark a year since
the U.S. central bank cut benchmark interest rates to near zero
to combat the worst economic slump in decades.
A year later, the world's biggest economy has broadly
recovered, but employment is still lagging.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings rose 0.304 tonnes on Monday,
marking the first rise since Dec. 3. []
Precious metals prices at 0532 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1125.45 -0.75 -0.07 27.87
Spot Silver 17.33 -0.03 -0.17 53.09
Spot Platinum 1446.25 2.75 +0.19 55.18
Spot Palladium 364.65 0.15 +0.04 97.64
TOCOM Gold 3230.00 8.00 +0.25 25.53 50743
TOCOM Platinum 4149.00 43.00 +1.05 56.45 9050
TOCOM Silver 500.70 2.70 +0.54 56.81 182
TOCOM Palladium 1052.00 2.00 +0.19 91.27 239
Euro/Dollar 1.4642
Dollar/Yen 88.90
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)
