(Corrects Reuters Instrument Code for Nikkei index in sixth
paragraph)
* Gold hovers above $880, trapped near previous day's range
* Trade thin ahead of Easter holiday weekend
* Equities seen drawing investors away from gold
* Gold still buoyed by economic, inflation worries
By Miho Yoshikawa
TOKYO, April 9 (Reuters) - Gold prices held steady above
$880 on Thursday as investors watched stock markets to gauge
investors' risk appetite, although trade was slow ahead of the
Easter holiday weekend.
Investors are looking for opportunities to sell gold and
buy other assets such as stocks, though gold remains supported
on dip buying because of persistent concerns about the health
of the global economy and financial system. Traders also said
fears of inflation are helping support bullion.
"I still think we are seeing a bit of a shift from the
safer investments back into equities, etc, at the moment, I
think that's basically the reason why we dipped under $900," an
analyst in Australia said.
Gold <XAU=> was at $881.80 per ounce at 0255 GMT, up 0.3
percent from New York's notional close of $879.55.
Bullion is now trading more than 10 percent below the
11-month high above $1,000 marked in February, after sinking
below $900 earlier this month.
Asian stocks outside Japan <.MIAPJ0000PUS> rose 1.7 percent
and Japan's Nikkei <> was up more than 2 percent on
Thursday, in tandem with Wall Street's rise the previous day.
[]
Ronald Leung, director of Lee Cheong Gold Dealers in Hong
Kong, said the outlook on the economy appeared better after the
G20 summit and some economic data, which was also denting
precious metal demand.
"There's less panic, everything seems to be stabilising a
bit more," Leung said.
Traders said gold was unlikely to move much ahead of the
Easter holiday weekend.
Gold fell on Wednesday after the Federal Reserve released
minutes of its last policy-setting meeting depicting more
economic gloom but little worry about inflation.
Traders said however, inflation worries were likely to be a
factor to lift gold to $1,000 or above in the long term, as
they seek the metal, traditionally seen as a hedge against
inflation.
"In six or 12 months' time, I still think gold will be
around $1,000, even higher," the analyst said.
Traders said gold's strength could be seen in the fact that
holdings of exchange-traded funds remain near record highs.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,127.37
tonnes as of April 8, unchanged from April 3 when they fell
from a record 1,127.44 tonnes. []
For details of the holdings of the ETF listed in New York
and co-listed on other exchanges, click on:
http://www.exchangetradedgold.com/iframes/usa.php
Prospects for inflation and weakness in the dollar were
also cited by JPMorgan as it raised its gold price outlook for
2009 and 2010. []
It lifted its 2009 price view for gold to $960 an ounce
from $831 previously.
A day earlier, metals consultancy GFMS increased its price
projections to $1,100 for 2009.
Precious metals prices at 0245 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 881.95 2.40 +0.27 0.20
Spot Silver 12.25 0.00 +0.00 8.22
Spot Platinum 1176.00 1.50 +0.13 26.18
Spot Palladium 231.00 0.50 +0.22 25.20
TOCOM Gold 2845.00 -6.00 -0.21 10.57
11440
TOCOM Platinum 3785.00 80.00 +2.16 42.72
8993
TOCOM Silver 392.10 0.90 +0.23 22.80
240
TOCOM Palladium 757.00 32.00 +4.41 37.64
379
Euro/Dollar 1.3245
Dollar/Yen 99.77
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 Hugh Lawson
and Ben Tan)
