* Gold heads up toward $940 in short-covering rally
* U.S. weekly jobless claims rise unexpectedly
* Fed statement hints at no hurry to raise rates
* Physical demand outlook weak; ETFs stable
By Nick Vinocur
London, June 25 (Reuters) - Gold climbed on Thursday,
probing towards $940, as its inverse correlation with the dollar
gave way to short covering after a surprise rise in U.S. jobless
claims damped risk appetite.
Spot gold <XAU=> stood at $938.10 per ounce at 1630 GMT, up
from $931.10 quoted late in New York on Wednesday. The metal
briefly hit a high of $939.20 earlier in the session.
U.S. weekly jobs data surprised to the downside, as the
number of workers filing claims for jobless benefits
unexpectedly rose [], easing pro-risk plays and
encouraging flows into the dollar.
The precious metal has moved some way off Monday's low of
$912.90, garnering support above $930 per ounce. Rising crude
prices <CLc1> also boosted its credentials as a potential hedge
against oil-induced inflation.
"We've backed away from lower levels near $915 and I suspect
we're seeing a bit of short covering, It just looks like the
market has got itself a bit too short," said Ole Hansen, an
analyst with Saxo Bank.
Analysts also said however that investors had taken support
from the U.S. Federal Reserve's post-policy meeting statement
that offered no hint of changes to its programme of quantitative
easing. []
Low U.S. interest rates are seen as potentially bearish for
the dollar from a yield perspective, raising the appeal of
dollar-denominated gold for non-U.S. investors.
SPDR HOLDINGS STABLE
U.S. gold futures for August delivery <GCQ9> gained slightly
to $934.50 an ounce.
Analysts said that while fundamental demand for gold
remained weak, the metal was still finding support from the
widespread view that the dollar would stay on the back foot.
"There are a couple of reasons to be negative -- ETF flows
are not particularly supportive for gold at the moment, and
Indian imports are down," said Dan Smith, an analyst with
Standard Bank.
"But we think gold can shake off some of these negative
factors. Our view on the economy is that things are slowly
improving, which supports the idea of a weaker dollar and
stronger gold," Smith added.
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. []
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. []
In other precious metals, spot silver <XAG=> firmed to
$13.96, against $13.83 quoted late in New York on Wednesday,
while platinum <XPT=> climbed to $1,180.00, against $1,156.00
and palladium <XPD=> was stronger $236.50 from $233.50.
(Additional reporting by Risa Maeda in Tokyo; editing by
Veronica Brown)
