* Confidence improving as $915 technical support holds
* Dollar firmness caps topside
* Holdings by SPDR Gold <XAUEXT-NYS-TT> unchanged
By Risa Maeda
TOKYO, June 25 (Reuters) - Gold rose 0.5 percent on Thursday
on improving technical charts and after a researcher from China's
ruling party called on the world's sixth biggest sovereign gold
holder to buy more bullion to hedge against the U.S. dollar.
But advances were limited as the greenback held most of the
gains it made after the Federal Reserve signalled on Wednesday
that it would not change its policy steps to support the economy.
Spot gold <XAU=> stood at $935.20 per ounce at 0624 GMT, up
0.4 percent from the notional close in New York of $931.10.
U.S. gold futures for August delivery <GCQ9> rose 0.2 percent
to $936 an ounce from the previous settlement. On Tuesday, the
contract rose $10.10, or 1.1 percent, on the COMEX division of
the New York Mercantile Exchange.
Bullion earlier rose as high as $936.30 after the head of the
economic department of the Communist Party policy research office
in China said at a Beijing forum that the country should buy more
gold, and that purchasing land in the United States was a better
option for China than buying U.S. Treasuries. []
"News that Russia and China are reviewing their dollar-based
assets has been circulating in the markets in the past six
months," said Shuji Sugata, a manager in Mitsubishi Corp Futures
and Securities' research team.
"The comments from the Chinese researcher are within what has
been said. But the fact that their stance in favour of gold has
not been changed is a plus for gold and that's why it's being
supported," he said.
But gold was still off Wednesday's high of $942.20, when
currency movements boosted bullion's dollar-hedge appeal after an
unexpected jump in U.S. durable goods orders in May.
Later in the day, the Fed, concluding a two-day meeting, said
it would hold overnight rates in a range between zero to 0.25
percent and gave no hint of an imminent exit from its easing
monetary policy. []
Investors mostly took in stride the Fed's comments about low
inflation risk, while at the same time remaining cautious on the
U.S. economy, traders said.
"The Fed is checking a market bias toward either inflation or
deflation. So, it's got to provide little incentive to trade
after gold had a bumpy ride the day before," said Naomi Suzuki, a
senior analyst at SC asset Management Co.
There are some bullish signs on technical charts as gold
stopped falling at $912.90 per ounce this week, traders and
analysts said.
"Despite a strong dollar capping the topside, people are more
confident as a technical support of $915 has been confirmed,"
Mitsubishi's Sugata said.
Bullion has come under pressure mainly due to a strong dollar
in the past few weeks. In early June, the precious metal hit a
three-month high of $989.80.
Underlining a lack of aggressive buying, holdings by the
world's largest gold-backed exchange-traded fund, the SPDR Gold
Trust <GLD>, remained at 1,131.24 tonnes on Wednesday, unchanged
since Monday. []
Precious metals prices at 0622 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 935.10 4.00 +0.43 6.24
Spot Silver 13.90 0.07 +0.51 22.79
Spot Platinum 1176.00 20.00 +1.73 26.18
Spot Palladium 236.00 2.50 +1.07 27.91
TOCOM Gold 2906.00 57.00 +2.00 12.94 42355
TOCOM Platinum 3666.00 88.00 +2.46 38.24 14778
TOCOM Silver 432.80 6.80 +1.60 35.55 319
TOCOM Palladium 743.00 19.00 +2.62 35.09 306
Euro/Dollar 1.3979
Dollar/Yen 96.30
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Risa Maeda and Miho Yoshikawa; Editing by Joseph
Radford)
