* Gold eases, but remains near two-month high
* ETF holdings rise by 1.2 pct
* Market ignores news of North Korea's nuclear test
By Miho Yoshikawa
TOKYO, May 25 (Reuters) - Gold was a touch softer on Monday
but remained within sight of a two-month high above $960
touched in the previous session, as bullion retained its sheen
in the face of dollar weakness.
Crude oil's rise to a six-month high has also benefited
gold, which is often bought both as an alternative to holding
the dollar and as an inflation hedge.
Gold markets showed little initial reaction to a report by
South Korea's Yonhap news agency, which quoted a ruling party
official as saying North Korea had conducted a nuclear test on
Monday. [][][]
But North Korea's latest provocation, coming after what it
called a peaceful satellite launch that sent a rocket over
Japan earlier in the year, was not expected to have a lasting
impact on investors who have become accustomed to such
sabre-rattling.
"By right when we get such news, safe havens such as gold
should get a bit of a boost," said Adrian Koh, an analyst at at
Phillip Futures.
"But I guess the markets are taking the news in their
stride, and perhaps we've got to see more details on the test
before acting on it," he said.
Public holidays on Monday in the United States and the
United Kingdom could also have been a factor in the lack of
market reaction, he added.
Gold <XAU=> was at $954.20 per ounce at 0311 GMT, down 0.2
percent from New York's notional close of $955.85.
On Friday, bullion touched a high of $961.30 an ounce, its
highest since March 20.
"Gold has most certainly been driven by recent weakness in
the dollar and that looks set to continue for the time being,"
said Darren Heathcote of Investec Australia in Sydney.
The dollar steadied on Monday, holding near a five-month
low hit against a basket of currencies last week when concern
that the United States may lose its AAA-rating status prompted
investors to sell the world's reserve currency. []
Heathcote said if gold breached the next key resistance
level of $962, it could move towards $1,000. The metal last
rose above $1,000 in late February, its highest level since
March 2008.
Oil prices fell towards $61 a barrel on Monday, shedding
some of the previous session's gains but hovering not far off
their six-month high, on growing risk aversion after North
Korea said it had successfully conducted a nuclear test. []
"Oil is certainly helping (gold), $62 a barrel is pretty
good, pretty bullish," Heathcote said.
A return of investor interest in gold was also underscored
by the slight rise in gold-backed exchange-traded funds.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings rose to 1,118.76
tonnes as of May 22, up 13.14 tonnes or 1.2 percent from the
previous business day.
Holdings hit a record high of 1,127.68 tonnes in early
April. []
Precious metals prices at 0310 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 954.20 -1.65 -0.17 8.41
Spot Silver 14.62 -0.01 -0.07 29.15
Spot Platinum 1149.50 -3.00 -0.26 23.34
Spot Palladium 233.00 1.00 +0.43 26.29
TOCOM Gold 2911.00 19.00 +0.66 13.14
17021
TOCOM Platinum 3529.00 31.00 +0.89 33.07
8155
TOCOM Silver 443.30 7.70 +1.77 38.83
248
TOCOM Palladium 719.00 11.00 +1.55 30.73
579
Euro/Dollar 1.3984
Dollar/Yen 94.47
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 Ben Tan)
