* Rise in SPDR Gold holdings shows gold's safe haven appeal
* Central bank interest continues to support gold
By Miho Yoshikawa
TOKYO, Dec 1 (Reuters) - Gold was mostly steady around $1,180
per ounce on Tuesday taking a break after a steep fall from
record highs late last week, although the precious metal's appeal
as a safe haven is expected to continue to attract buying.
The dollar came down from the day's highs versus the yen
after the Bank of Japan said it would pump more cash into the
banking system after an emergency meeting, while keeping interest
rates unchanged. But the impact of the news on the precious metal
has been moderate. [] []
"The market is awaiting further developments on currency
markets on this news," a Japanese analyst said.
Further buying in the dollar due to the unwinding of a
massive amount in dollar short/yen long positions could hurt the
precious metal, but whether such unwinding will accelerate or not
is still unclear, the analyst said.
A weak outlook for the dollar was one of the main drivers for
gold's rally by almost 13 percent in November, when it hit a
record near $1,195 per ounce.
Spot gold <XAU=> stood at $1,179.05 per ounce as of 0656 GMT,
almost flat from New York's notional close of $1,179.10.
Bullion inched down as low as $1,175.05 after the dollar hit
a high above 87 yen on news that the Japanese central bank would
hold an extraordinary policy meeting at 2 p.m. (0500 GMT).
But the U.S. currency failed to rise further after the BOJ's
policy announcement and stood at around 86.80 yen. []
Late last week, gold fell as low as $1,136.80 after news that
Dubai planned to delay repayments on billions of dollars in debt
revived fears of another global credit crisis and prompted
investors to sell gold to raise cash to cover losses in stocks
and elsewhere.
Fears about possible repercussions from the Dubai debt
situation appear to have receded for now, traders said.
U.S. gold futures for February delivery <GCG0> were at
$1,180.30 per ounce on the COMEX division of NYMEX, down 0.2
percent.
Kazuhiko Saito, a chief analyst at Fujitomi Co Ltd in Tokyo,
said gold's strength as a classic safe-haven investment was
demonstrated in a rise in holdings in exchange-traded funds.
SPDR Gold Trust <GLD> said its holdings stood at 1,129.994
tonnes as of Nov. 30, up 2.134 tonnes or 0.2 percent from the
previous business day. []
"The fact that gold ETFs are up is a positive factor for gold
... as it demonstrates that investors are still drawn to the
precious metal as a safe haven," he said.
Saito said gold's long-term uptrend remained intact,
particularly as central banks continued to show an interest in
increasing their holdings of the precious metal.
The International Monetary Fund said on Nov. 25 it had sold
10 tons of gold to the Central Bank of Sri Lanka, while media
reports said India was open to more buying of the precious metal.
[]
A senior Chinese official said in remarks published on Monday
that Dubai's debt crisis could be China's opportunity to buy gold
and oil assets. []
The China Youth Daily quoted Ji Xiaonan as saying: "We
suggested that China's gold reserves should reach 6,000 tonnes in
the next 3-5 years and perhaps 10,000 tonnes in 8-10 years."
Ji chairs the supervisory board for big state-owned companies
under the State Council's state assets commission.
"I think that comment by China yesterday is a bit
unrealistic, but it could prove to be an incentive to boost gold
at some point," Saito said.
Noncommercial net long U.S. gold futures positions rose 11.3
percent to a record 262,331 lots in the week to Nov. 24 from
235,697 lots, a weekly report by the U.S. Commodity Futures
Trading Commission showed. []
The previous record was marked in the week to Oct. 13.
The world's largest silver-backed exchange-traded fund, the
iShares Silver Trust <SLV>, said its silver holdings rose 152.77
tonnes or 1.7 percent from the previous business day to a record
9,404.79 tonnes as of Nov. 30. []
Precious metals prices at 0657 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1179.25 0.15 +0.01 33.98
Spot Silver 18.45 0.00 +0.00 62.99
Spot Platinum 1455.50 3.50 +0.24 56.17
Spot Palladium 364.50 1.00 +0.28 97.56
TOCOM Gold 3324.00 63.00 +1.93 29.19 82781
TOCOM Platinum 4098.00 79.00 +1.97 54.52 13776
TOCOM Silver 521.00 14.90 +2.94 63.17 394
TOCOM Palladium 1029.00 2.00 +0.19 87.09 283
Euro/Dollar 1.5017
Dollar/Yen 86.74
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 Risa Maeda; Editing by Joseph Radford)
((miho.yoshikawa@thomsonreuters.com; +81-3 6441 1854; Reuters
Messaging: miho.yoshikawa.reuters.com@reuter s.net))
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