* After swift rally, gold inches below $995
* Uncertainty about equities spurs safe-haven buying
By Miho Yoshikawa
TOKYO, Sept 4 (Reuters) - Gold hovered just below $1,000 on
Friday, taking a break after its strongest two-day performance
since March as safe-haven demand stoked renewed investor
buying.
Worries about the global economy and the sustainability of
this summer's stock market gains have pushed bullion,
traditionally a port of refuge during economic storms, up about
5 percent over the past two days to a six-month high on
Thursday.
The precious metal is on course for its biggest weekly gain
since late April.
Gold is also seen as a hedge against inflation, a factor
that is gaining increasing prominence as central banks keep
pumping money into the financial system to jolt the economy.
Shuji Sugata, a manager at Mitsubishi Corp Futures &
Securities, said the rise was driven by technicals as money
that had been flowing to other commodities such as crude oil,
raw sugar and soy beans now went to gold, after those
commodities peaked.
"When the outlook is uncertain, money tends to flow to the
market which is showing a clear trend ... in this case precious
metals led by gold," he said. Trend-following money is what is
spurring the rise in gold, he said.
Spot gold <XAU=> was at $989.30 by 0315 GMT after touching
a peak of $997.20 on Thursday.
U.S. gold futures for December delivery <GCZ9>, now at
$991.40, came even closer to four digits with a session peak of
$999.50 per ounce on Thursday.
Gold last approached $1,000 on June 3, when it rose to a
peak of $993.60 as gold's traditional inverse relationship with
the dollar appeared to reassert itself.
It tumbled the next day in heavy profit-taking.
Gold last topped $1,000 on Feb. 20, the highest level since
March 2008.
"Gold had a positive correlation with stocks for the last
three months, but now that there are signs of weakness in
stocks investors are turning to the metal in flight-to-quality
buying," said Masayo Kondo, president of Fisco Commodity Ltd.
U.S. stocks fell for four days running before Thursday's
late day rally snapped the losing streak [], with U.S. retail
sales in August coming in stronger than expected even if still
down 2.9 percent on the year.
Regional stocks fell on Friday, with Japan's Nikkei average
<> edging down 0.2 percent in thin, see-saw trade with
traders reluctant to buy ahead of key U.S. jobs data, while
Chinese stocks opened down 0.14 percent. [] []
The key economic number this week comes up later on Friday
when U.S. non-farm payrolls data is released, with employers
expected to cut jobs by the smallest amount in a year.
[]
Strong investment demand is also helping to fuel gold's
gains.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust, said holdings stood at 1,078.01 tonnes as of
Sept. 3 <XAUEXT-NYS-TT>, up 14.65 tonnes or 1.4 percent from
the previous business day. []
It was the second day of gains for the fund, which marked a
record high of 1,134.03 tonnes on June 1.
Investors lost interest in the fund for about a month from
mid-July when holdings fell about 3 percent as worries about
inflation eased.
Precious metals prices at 0313 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 989.65 -0.45 -0.05 12.44
Spot Silver 16.07 -0.01 -0.06 41.96
Spot Platinum 1258.50 9.00 +0.72 35.03
Spot Palladium 289.00 0.00 +0.00 56.64
TOCOM Gold 2956.00 44.00 +1.51 14.89
46787
TOCOM Platinum 3759.00 77.00 +2.09 41.74
11374
TOCOM Silver 478.20 18.20 +3.96 49.77
356
TOCOM Palladium 875.00 22.00 +2.58 59.09
348
Euro/Dollar 1.4248
Dollar/Yen 92.56
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
