* Investors may cut longs across markets before holidays
* Gold seen facing resistance again at $960/oz
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Chikako Mogi
TOKYO, Aug 3 (Reuters) - Gold steadied on Monday after rising
earlier as the dollar fell to its lowest this year on growing
risk appetite, with investors becoming cautious about pushing
prices above a key resistance level that has held for most of
2009.
A recent recovery in risk appetite on better-than-expected
U.S. corporate earnings and data has prompted investors to pour
funds into risk assets, including stocks and commodities,
exposing these markets to a potential correction as liquidity is
likely to drop during the summer holidays, some traders said.
For gold, a lack of imminent risks that could prompt
investors to seek bullion as a safe haven and its failure so far
to break above a key resistance point suggest prices have limited
upside scope.
"Gold prices seem to be tracking the weakness of the dollar,"
said David Moore, a commodities strategist at Commonweath Bank of
Australia, noting how gold extended gains earlier on Monday after
rising sharply the previous session when the dollar slid broadly.
At the same time, underlying weakness in demand for jewellery
fabrication and diminishing safe-haven demand for gold may be
tempering demand for bullion and keeping prices in a broad range
between $900-$1,000 which has held all this year, he said.
Spot gold <XAU=> rose 0.3 percent to $956.50 an ounce before
trading at $953.50 at 0220 GMT, little changed from New York's
notional close of $953.75 per ounce.
The dollar <.DXY> hit its lowest point this year against a
basket of currencies on Monday after higher oil prices, steady
global stock markets and data late last week showing an
unexpectedly small contraction in the U.S. economy boosted risk
appetite and curbed safe-haven demand for the greenback. []
U.S. gold futures for December delivery <GCZ9> also rose 0.4
percent, to $959.50 earlier on Monday before trading at $956.20
as of 0220 GMT, barely changed from $955.80 an ounce on the COMEX
division of the New York Mercantile Exchange.
"Gold may be exposed to the risk of coming down along with
other assets which have been rising, as investors tend to close
out long positions during the summer holidays," said Wakako
Harada, a senior trader at Mitsubishi Corp in Tokyo.
"Since there is no risk that investors feel they should avert
right now, gold is likely to be dragged down with other markets.
For much of this year, gold has not held above $955-$960, which
has become a psychological resistance level," she said.
Except for the two times in February and June when prices
jumped to around $1,000, gold has been spurned at around $960
this year.
In other markets, the CRB commodity index posted a third week
of gains, albeit increasingly mild ones, with the market now
stuck between its year low in the first quarter and its peak in
June, while Asian stocks were marginally higher on Monday after
ending July with double-digit gains.
Noncommercial net long New York gold futures positions eased
slightly to 172,771 lots in the week to July 28 from 173,302 lots
the previous week, the weekly Commitments of Traders report by
the Commodity Futures Trading Commission showed. []
As the gold market remained in rangebound, so did investment
flows.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings stood at 1,072.87 tonnes as
of July 31, unchanged from the previous business day. []
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, however, said its silver holdings
rose 61.21 tonnes, or 0.7 percent to a record 8,828.14 tonnes as
of July 31.
PRICES
Precious metals prices at 0521 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 953.50 -0.40 -0.04 8.33
Spot Silver 14.05 0.16 +1.15 24.12
Spot Platinum 1210.50 3.00 +0.25 29.88
Spot Palladium 262.00 0.50 +0.19 42.01
TOCOM Gold 2915.00 32.00 +1.11 13.29 19811
TOCOM Platinum 3703.00 47.00 +1.29 39.63 6693
TOCOM Silver 428.20 10.90 +2.61 34.11 114
TOCOM Palladium 805.00 6.00 +0.75 46.36 253
Euro/Dollar 1.4239
Dollar/Yen 94.74
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Joseph Radford)
