* Gold breaks above $939; dollar steadies after Fed meeting
* Fed statement hints at no hurry to raise rates
(Adds data, analyst comment, updates prices)
By Nick Vinocur
London, June 25 (Reuters) - Gold climbed on Thursday, rising
above $939 per ounce as investors found support from indications
by the U.S. Federal Reserve that it was in no hurry to raise
borrowing costs from ultra-low levels.
Spot gold <XAU=> stood at $934 per ounce at 1248 GMT, up
from $931.10 quoted late in New York on Wednesday. The metal
briefly hit a high of $939.05 earlier in the session.
The precious metal, viewed as a hedge against risk, has
moved some way off Monday's low of $912.90, garnering support
above $930 per ounce as long-term expectations of a slow
economic recovery were mostly unchanged after the Fed's remarks.
The Fed's statement, released late on Wednesday, painted a
cautiously favourable picture of the U.S. economy but offered no
hint of changes to its programme of quantitative easing.
[]
"The fact that going forward (the Fed) is keeping rates as
they are and sticking with quantitative easing is supportive for
gold," said James Moore, an analyst at the TheBullionDesk.com.
"But physical demand is still very slow and there are still
quite a lot of speculative longs in the market and we are in a
position where we need to flush some of those out," he added.
Low U.S. interest rates are seen as bearish for the dollar
from a yield perspective, raising the appeal of
dollar-denominated gold for non-U.S. investors.
Gold pared gains briefly, while the dollar strengthened,
after data showed the U.S. economy shrank slightly less in early
2009 than previously thought. []
But bullion resumed earlier gains, with other more bearish
economic data showing the number of U.S. workers filing new
claims for jobless benefits unexpectedly rose last week.
[]
Analysts said gold was testing higher levels after bouncing
off a low near $915 earlier in the week, with higher oil prices,
currently nearing $70 a barrel, giving support to long-term
inflation expectations.
"Technically speaking (gold) looks a little better than it
has in the last few days -- it's trying to break upward now out
of a downward trending channel," said Tom Kendall, an analyst at
Mitsubishi. "If we close above $940, gold would look positive in
terms of breaking out of this general downward formation."
SPDR HOLDINGS STABLE
U.S. gold futures for August delivery <GCQ9> slipped
slightly to $933.50 an ounce.
Earlier on Thursday the head of the economic department of
the Communist Party policy research office in China said 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. []
"The market is already pricing in Chinese demand," said
Jesper Dannesboe, analyst at Societe Generale.
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. []
In other precious metals, spot silver <XAG=> firmed to
$13.93, against $13.83 quoted late in New York on Wednesday,
while platinum <XPT=> was at $1,178.50.00, against $1,156.00 and
palladium <XPD=> was slightly stronger $235.50 from $233.50.
(Additional reporting by Risa Maeda in Tokyo and Veronica Brown
in London; editing by James Jukwey)
