Gold steady above $950/oz, ETF up 0.92 metric tons

TOKYO Mon Aug 24, 2009 8:56am IST

TOKYO (Reuters) - Gold was steady above $950 an ounce on Monday, pausing after touching a one-week high near $960 the previous session, as light buying was encouraged by extended gains in oil and equities markets.

But there was no strong follow-through buying as investors mostly sat on the sidelines before U.S. data on housing and consumer sentiment later this week.

Short-term money inflows into commodities, including gold, and other risky assets helped prop up the precious metal on Friday after a strong U.S. housing sales report and upbeat comments from Federal Reserve Chairman Ben Bernanke.

Spot gold was at $952.60 an ounce at 0226 GMT, almost flat from the notional New York close of $952.65.

"Gold is being underpinned by buying from speculators, with the euro's recovery above $1.43 and a rally in oil to the year-to-date high levels increasing their risk tolerance," said Shuji Sugata, manager at Mitsubishi Corp Futures & Securities' research team.

"But such buying is not sustainable. They stop buying when gold rises toward $960, which looks like an initial resistance," he said.

U.S. gold futures for December delivery were flat at $954.70 per ounce. On Friday, the contract rose $13, or 1.4 percent, on the COMEX division of the New York Mercantile Exchange.

Non-commercial net long positions in New York gold futures contracts fell to 177,530 lots in the week ended on August 18, down 6.6 percent from 190,086 lots, a weekly report by the Commodity Futures Trading Commission showed.

Bullion rose 0.8 percent last week and hit a one-week high of $957.65 on Friday. The dollar's recent fall against the euro has boosted the metal's appeal as a hedge against the falling U.S. currency.

"Gold maintains its traditional role as an asset to avoid risks like, for example, a weak dollar, inflation and volatility in equity markets. Apart from that, gold has also attracted demand from those seeking short-term capital gains like those in other commodities," Sugata said.

Partly reflecting such short-term money inflows, the holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.92 metric tons on Friday, marking the first rise since July 16.

Its holdings stood at 1,066.41 metric tons on Friday, up from 1,065.49 metric tons the previous day. <GOL/SPDR>

It was the biggest one-day increase since June 1, when the holdings rose by 15.27 metric tons to a record of 1,134.03 metric tons.

For a graphic on SPDR holdings, click on:

here

Spot platinum rose 0.5 percent to $1,257 per ounce, with investors taking mostly in stride news on Sunday that South Africa's miners' union has suspended an indefinite strike set to start on Monday at the world's No.2 platinum producer, Impala Platinum.

Precious metals prices at 0218 GMT

Metal Last Change Pct chg YTD pct chg Turnover

Spot Gold 952.95 0.30 +0.03 8.27

Spot Silver 14.27 0.12 +0.85 26.06

Spot Platinum 1257.00 6.00 +0.48 34.87

Spot Palladium 281.00 2.50 +0.90 52.30

TOCOM Gold 2910.00 70.00 +2.46 13.10 31505

TOCOM Platinum 3830.00 118.00 +3.18 44.42 8598

TOCOM Silver 435.50 18.10 +4.34 36.39 132

TOCOM Palladium 866.00 42.00 +5.10 57.45 276

Euro/Dollar 1.4345

Dollar/Yen 94.67

TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.

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