* Stronger buying expected in new year
* Physical demand acting as support
(Adds fresh comment, updates prices)
By Jonathan Saul
LONDON, Dec 29 (Reuters) - Gold was little changed on
Tuesday at around $1,103 an ounce due to low investor liquidity
but dollar weakness and expectations of stronger buying in the
new year were set to support bullion prices.
Spot gold <XAU=> was at $1,101.20 an ounce by 1555 GMT,
versus $1,105.60 an ounce late in New York on Monday. Bullion
tumbled to a seven-week low of $1,074.10 an ounce last week
before the holiday break.
"It's biding time until the new year," VM Group analyst
Matthew Turner said. "Sentiment is reasonably bullish."
He said gold's reversal from last week's low was positive.
"Players are still looking to the dollar for direction but
the lack of upside this morning, when we had the stronger euro,
suggests that there is still some long liquidation going on,"
TheBullionDesk.com analyst James Moore said.
"Certainly the longer term trend is still very much to the
upside for gold."
The dollar fell against the euro on Tuesday due to improved
investor appetite for risk. []
Weakness in the U.S. dollar boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
"It feels like $1,100 is well supported for the time being
on the upside. I would say $1,110 seems to be a good
resistance," Afshin Nabavi, head of trading with MKS Finance,
said.
Deutsche Bank trader Michael Blumenroth said it was likely
that gold could push higher due to a stronger euro.
"People would rather be happy to see gold moving higher at
the end of year rather than lower," he said.
U.S. data released on Wednesday, including consumer
confidence data, confirmed the U.S. economy is improving but
failed to overwhelm currency investors. []
FIRM PHYSICAL DEMAND
U.S. gold futures for February delivery <GCG0> were down
0.51 percent at $1,102.40 from $1,107.90 an ounce on the COMEX
division of the New York Mercantile Exchange on Monday. Futures
rose to a record high of $1,227.50 on Dec. 3.
Nabavi said good physical demand for gold was also helping.
"That is one of the reasons why gold is being supported
every time it goes lower," he said. "So if it continues in this
manner, I think probably beginning of next year we should have a
move on the upside."
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,132.708 tonnes as
of Dec. 28, unchanged since Dec. 21. Holdings hit a record high
of 1,134.03 tonnes on June 1. []
Among other precious metals, spot silver <XAG=> was bid at
$17.27 an ounce against $17.50.
The U.S. Securities and Exchange Commission took a
regulatory step on Dec. 22 that brought shares of ETF Securities
Platinum and Palladium trusts closer to final approval for trade
on the New York Stock Exchange. []
The move has helped buoy platinum and palladium prices.
Earlier on Tuesday palladium rose to its highest level since
Dec. 2.
Platinum <XPT=> was at $1,466.50 ounce against $1,479.00,
while palladium <XPD=> was at $386.50 against $387.50.
(Additional reporting by Chikako Mogi in Tokyo; editing by
James Jukwey)
