* Gold seen solid at or above $1,150/oz on bargain-hunting
* SPDR Gold holdings unchanged, pausing near record level
By Risa Maeda
TOKYO, Dec 8 (Reuters) - Gold steadied on Tuesday, moving
away from a two-week low marked the previous day as the dollar
weakened after the Federal Reserve chief cautioned that the U.S.
economic recovery remains fragile.
Spot gold <XAU=> was at $1,161.55 per ounce at 0604 GMT, up
0.4 percent from New York's notional close of $1,156.90.
Gold fell as low as $1,135.80 on Monday, its lowest since
Nov. 20.
U.S. gold futures for February delivery <GCG0> were 0.1
percent lower at $1,162.60 per ounce, but above Monday's trough
of $1,136.10.
"A recovery in the dollar on an unwinding of dollar shorts
against the euro and other major currencies is coming to a halt,
and that favours gold," said Kaname Gokon, deputy general manager
at Japanese commodity brokerage Okato Shoji Co's research
section.
"Also, investors who have lagged need to buy on dips," he
said, adding that gold seems to have strong support at around
$1,150 per ounce after failing to fall much below $1,140.
In the currency market, the dollar fell and the yen rose
after senior Federal Reserve officials curbed speculation of a
quick rise in U.S. rates after a promising jobs report last week.
[]
Gold has maintained its allure as a hedge against a weakening
dollar and some central banks, including India's, recently
confirmed they bought gold to diversify assets.
But the precious metal's gains were capped amid caution that
any data showing strength in consumer spending in the world's
biggest economy could prop up the dollar and undermine gold.
"People are vigilant to any mini version of the shock they
suffered after the U.S. nonfarm payrolls data," Gokon said.
Friday's U.S. data showing fewer-than-expected job losses
prompted speculation the Federal Reserve may lift interest rates
from their current historic lows sooner rather than later, which
could help the dollar and cut support for gold.
A day before the jobs data, bullion rose to an all-time high
at $1,226.10 an ounce. Investors had sold low-cost dollars to
invest in riskier assets, including gold.
Veteran Wall Street economist Henry Kaufman said at the
Reuters Investment Outlook Summit in New York on Monday that the
return of leveraged bets was one driver causing a "speculative
fervor" in commodities, probably in the gold market.
[]
Because commodity markets are small compared with some other
financial markets, comparatively modest shifts out of other
assets can raise the risks in commodities, he said.
But Kaufman, who correctly predicted higher inflation and
interest rates in the 1970s and 1980s, played down the risks of
inflation and said that financial markets will not be derailed
if, as he expects, the Fed raises interest rates by the second
half of 2010.
On the investment side, the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust <GLD>, said its holdings
stood unchanged at 1,129.966 tonnes on Monday, pausing near a
record 1,134.03 tonnes marked on June 1. []
PRICES
Precious metals prices at 0603 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1161.30 4.40 +0.38 31.94
Spot Silver 18.23 0.07 +0.39 61.04
Spot Platinum 1454.00 15.50 +1.08 56.01
Spot Palladium 374.50 3.50 +0.94 102.98
TOCOM Gold 3332.00 -20.00 -0.60 29.50 96509
TOCOM Platinum 4175.00 20.00 +0.48 57.43 10753
TOCOM Silver 524.30 -7.20 -1.35 64.20 620
TOCOM Palladium 1083.00 10.00 +0.93 96.91 315
Euro/Dollar 1.4840
Dollar/Yen 88.91
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 Joseph
Radford)
