* 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 fell on Thursday, coming under
pressure from a higher dollar and paring gains made the day
before after the Federal Reserve noted some bright spots in the
economy but reiterated its stance 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 $1.4398. []
A higher dollar was hurting the allure of gold as an
alternative investment but many dealers were reluctant to take
fresh short positions aggressively 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 $1,127.60 per ounce at 0629 GMT, down
1 percent from New York's notional close of $1,137.80.
It hit a one-month low of $1,109.10 last week.
"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 8 percent below a record high of
$1,226.10 hit on Dec. 3.
Underlying solid demand from long-term investors, 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. []
U.S. gold futures for February delivery <GCG0> traded down
0.8 percent at $1,127.10 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 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. []
Precious metals prices at 0631 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1126.00 -11.80 -1.04 27.93
Spot Silver 17.42 -0.25 -1.41 53.89
Spot Platinum 1439.00 -12.50 -0.86 54.40
Spot Palladium 368.00 -3.50 -0.94 99.46
TOCOM Gold 3271.00 20.00 +0.62 27.13 104202
TOCOM Platinum 4190.00 31.00 +0.75 57.99 14689
TOCOM Silver 510.00 6.30 +1.25 59.72 409
TOCOM Palladium 1067.00 15.00 +1.43 94.00 295
Euro/Dollar 1.4400
Dollar/Yen 90.06
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
