* Gold in uptrend, near-term target seen at $1,050/oz
* SPDR Gold holdings <XAUEXT-NYS-TT> inch up 0.2 pct
* Japan's biggest bullion retailer sees mixed flows
By Chikako Mogi
TOKYO, Oct 7 (Reuters) - Gold eased from record highs on
Wednesday as investors took profits, but sentiment remained
bullish and a fresh record was within sight as the dollar's
weakness and inflation concerns reinforced bullion's appeal as a
hedge.
Both spot gold and U.S. gold futures <GCZ9> have benefited
from factors including technical buying, growing talk of
countries diversifying foreign reserves or settlement currencies
away from the dollar, and inflation concerns fuelled by current
massive fiscal stimulus measures and aggressive monetary easing.
"The driving force for gold's rally is the declining
confidence in the dollar, which helped elevate gold's stature,
along with the explosive growth in gold-backed exchange-traded
funds which broadened the investor base for bullion," said Shuji
Sugata, a manager at Mitsubishi Corp Futures & Securities.
"Technically the market is very much in favour of the bulls
as nobody can complain about gold prices rising, so barring
profit taking that may cap prices for a short time, the market
looks set to test fresh highs," he said.
The near-term target is likely $1,050 per ounce, but the
$1,040 level offers good profit taking opportunities and may
prove to offer resistance that market players need to clear
first, he said.
"We're seeing a period of consolidation below $1,040 an
ounce. Importantly, gold does not appear to be finding support
from Tokyo, which is the key region in our time zone," said
Nigel Moffatt, head of treasury for the Perth Mint.
Osamu Ikeda, general manager at Tanaka Kikinzoku Kogyo,
Japan's biggest bullion retailer, said flows were mixed at this
shop this morning.
"Both buyers and sellers are coming to the shop today, they
are more or less evenly balanced. It's been like that over the
past few days as investors stay sidelined to mull over which
direction the gold market is taking," he said.
Spot gold <XAU=> was little changed at $1,040.65 per ounce at
0604 GMT, retreating from an all-time peak of $1.043.45 set on
Tuesday.
The most active U.S. gold futures for December delivery
inched up 0.2 percent to $1,042.0 an ounce, also below an
all-time high of $1,045 hit on Tuesday. December contracts
settled at $1,039.70 an ounce.
Renowned investor Jim Rogers, one of the biggest bulls on
this decade's commodities rally, said he would stay away from
buying gold a day after bullion set a new record high, but that
he still saw further gains in the long-term. []
Investment flows picked up as the market rallied to the
record highs.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,100.514
tonnes as of Oct. 6, up 0.2 percent or 2.441 tonnes from the
previous business day for the third consecutive day of increase.
<XAUEXT-NYS-TT>
The holdings rose to a record high of 1,134.03 tonnes on June
1.
"There was some profit taking initially, but given the fact
that we continue to see further weakening in the U.S. dollar,
people might be tempted to hold on and I think it will push
higher," said Darren Heathcote of Investec Resources in Sydney.
Gold has gained about 18 percent in the year to date.
The greenback remained pressured on Wednesday after the U.S.
currency slid broadly the day before as an interest rate hike in
Australia underscored concerns the Federal Reserve will lag other
central banks in pulling out of its loose monetary policy. []
Also weighing on the U.S. dollar was a British newspaper
report that Gulf Arab states were in secret talks with Russia,
China, Japan and France to replace the greenback with a basket of
currencies in trading oil, though big oil-producing countries
denied the report. For details see [].
PRICES
Precious metals prices at 0604 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1040.55 -0.30 -0.03 18.22
Spot Silver 17.36 0.04 +0.23 53.36
Spot Platinum 1333.00 19.50 +1.48 43.03
Spot Palladium 311.50 6.00 +1.96 68.83
TOCOM Gold 2977.00 49.00 +1.67 15.70 57295
TOCOM Platinum 3815.00 91.00 +2.44 43.85 15448
TOCOM Silver 495.00 13.30 +2.76 55.03 588
TOCOM Palladium 893.00 33.00 +3.84 62.36 669
Euro/Dollar 1.4697
Dollar/Yen 88.65
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 James Regan in Sydney)
