* Liquidation worries to increase towards month-end
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Miho Yoshikawa
TOKYO, Sept 24 (Reuters) - Spot gold rallied to trade around
$1,010 on Thursday as the precious metal continued to look to the
dollar for direction, though a sense of caution prevailed due to
the threat of heavy liquidation of futures positions.
Spot gold <XAU=>, which fell in the previous session after
the dollar turned higher, is currently down about 1 percent from
an 18-month high of $1,023.85 hit last Thursday.
"The trend of a strong euro and weak dollar is what's keeping
the price of gold above $1,000," said Shuji Sugata, a manager in
the Mitsubishi Corp Futures & Securities research team.
The euro was around $1.4719 <EUR=>, recovering from earlier
losses when it fell as low as $1.4685 on trading platform EBS, to
trade slightly below the levels of late US trade.
Sugata added, however, that investors needed to watch long
positions in the New York market.
Noncommercial net long positions in gold futures in New York
are at an all-time high, raising concerns that this together with
the sharp rally, which has prompted the precious metal to rise as
much as 16 percent this year, could lead to a bout of selling.
"Concerns about long liquidation are likely to increase
towards the end of the month, and this is something we'll have to
keep an eye out for," he said.
Traders in Tokyo returned to the market after a three-day
break from Monday to Wednesday due to a series of national
holidays.
Gold <XAU=> was at $1,009.95 an ounce at 0531 GMT, up 0.3
percent from the notional close in New York of $1,007.05, after
earlier rising as high as $1,012.0.
U.S. gold futures for December delivery <GCZ9> were at
$1,011.6 an ounce, down 0.3 percent.
Sugata said the results of the latest Federal Reserve Open
Market Committee (FOMC) meeting were not surprising.
The Federal Reserve on Wednesday kept key U.S. interest rates
unchanged, and pledged to keep rates low for an extended period.
It also upgraded its assessment of the U.S. economy.
[]
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,101.735
tonnes as of Sept. 23, unchanged from the previous business day.
[]
Gold buying by India, one of the world's largest consumers,
picked up due to the festival season when people traditionally
buy ornaments as gifts. [] []
Japan's Nikkei stock average rose 1.2 percent on Thursday,
with exporters rising. []
Precious metals prices at 0532 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1010.20 3.15 +0.31 14.78
Spot Silver 16.77 0.06 +0.36 48.14
Spot Platinum 1323.00 4.50 +0.34 41.95
Spot Palladium 295.00 3.00 +1.03 59.89
TOCOM Gold 2962.00 -19.00 -0.64 15.12 33754
TOCOM Platinum 3868.00 -47.00 -1.20 45.85 7499
TOCOM Silver 490.00 -13.80 -2.74 53.46 495
TOCOM Palladium 862.00 -19.00 -2.16 56.73 137
Euro/Dollar 1.4721
Dollar/Yen 90.84
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 Joseph
Radford)
