* Gold under pressure from higher dlr but relatively solid
* SPDR Gold holdings rise 0.3 pct to 1,120.514 tonnes
By Risa Maeda
TOKYO, Dec 17 (Reuters) - Gold prices edged down on Thursday
but mostly held on to gains made the previous day after the
Federal Reserve noted some economic improvements but reiterated
its pledge to keep interest rates low.
The Fed's pledge on Wednesday to keep interest rates low for
"an extended period" reaffirmed the weak outlook for the dollar.
[]
But in the short term the dollar was on the rise, driven by
unwinding of short dollar, long euro positions ahead of the
year-end. The euro fell below a key support of $1.46-$1.45 this
week to trade at around $1.4430. []
The dollar's rise was hurting the allure of gold as an
alternative investment but dealers were mostly reluctant to take
fresh short positions as the Christmas holidays near, limiting
falls.
Gold prices were also underpinned by expectations that
physical demand will emerge if the precious metal falls close to
$1,100-$1,000 per ounce, traders said.
Spot gold <XAU=> was at $1,133.70 per ounce at 0311 GMT, down
0.4 percent from New York's notional close of $1,137.80.
"Gold remains relatively strong. It's shaking off its
correlation to the euro, which is weakening," said Kaname Gokon,
research manager at Tokyo-based commodities broker Okato Shoji
Co.
"Gold is more dominated by long-term holders of long
positions and is less affected by short term trends," he said,
adding that gold would be underpinned at $1,125-$1,130 even if
the euro slips towards $1.42.
Gold is now trading about 7 percent below a record high of
$1,226.10 hit on Dec. 3.
U.S. gold futures for February delivery <GCG0> traded at
$1,134.30 per ounce. On Wednesday, the contract settled up $13.20
at $1,136.20 on the COMEX division of the New York Mercantile
Exchange.
Futures hit a record high $1,227.50 hit on Dec. 3.
In a Reuters poll conducted after the Fed meeting, most U.S.
primary government securities dealers expect the U.S. central
bank to raise interest rates by the end of the first quarter of
2011, with differences largely tied to when forecasters think
U.S. unemployment will peak. []
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings rose 3.963 tonnes to
1,120.514 tonnes on Wednesday. []
Precious metals prices at 0303 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1133.80 -4.00 -0.35 28.82
Spot Silver 17.51 -0.16 -0.91 54.68
Spot Platinum 1444.50 -7.00 -0.48 54.99
Spot Palladium 370.15 -1.35 -0.36 100.62
TOCOM Gold 3298.00 47.00 +1.45 28.18 67201
TOCOM Platinum 4205.00 46.00 +1.11 58.56 10340
TOCOM Silver 515.00 11.30 +2.24 61.29 291
TOCOM Palladium 1075.00 23.00 +2.19 95.45 165
Euro/Dollar 1.4415
Dollar/Yen 90.04
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
