* Gold takes cues from currency as investors on sidelines
* Gold posted biggest weekly drop in 3 weeks last week
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
By Chikako Mogi
TOKYO, July 6 (Reuters) - Gold prices inched down on Monday
as the dollar steadied against the euro, but trading was subdued
following a U.S. holiday, with traders looking for direction from
the currency market.
With investors staying largely on the sidelines and jewellery
demand weak, prices were trading in very narrow ranges, traders
said.
Gold prices fell about 0.7 percent last week, the biggest
weekly decline in three weeks, having retreated from a four-month
high near $990 hit in early June.
Gold last rose above $1,000 in February and traders said
momentum to retest the key level has waned, and risk was now on
the downside.
"There are no incentives to do something at current levels as
we have seen them many times before, so players are taking a
wait-and-see stance," said Yuichi Ikemizu, Tokyo branch manager
at Standard Bank Plc.
"You can say players are taking their cues from the currency
market," he said, adding that many players have grown doubtful
about gold topping $1,000 again although physical demand keeps
emerging when the market approaches $900.
Spot gold <XAU=> inched down 0.3 percent to $929.35 per ounce
as of 0243 GMT, down from New York's notional close of $932.30.
U.S. gold futures for August delivery <GCQ9> eased 0.2 percent
to $929.5 per ounce, compared with $931.00 on the COMEX division
of the New York Mercantile Exchange.
U.S. financial markets were closed on Friday for the
Independence Day holiday.
The dollar was up 0.1 percent against the euro on Monday
after easing versus the single currency on Friday. The dollar
gained on Thursday following weak U.S. jobs data which dampened
hopes that the global economy is poised to recover. []
"I expect gold prices to become top-heavy in the third
quarter as it is not clear who has the capacity to buy gold, when
jewellers aren't buying and investors aren't buying," said Naomi
Suzuki, a senior analyst at SC Asset Managment Co.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings were at 1,120.55 tonnes as
of July 3, unchanged from the previous business day. []
"SPDR is seeing small lot selling here and there, suggesting
that existing investors in gold aren't expecting gold to top
$1,000," she said.
Traders said if equities markets were to rise, it could give
investors more leeway to invest in other assets including gold.
Asian stocks were mostly lower on Monday, with the Nikkei
stock average extending losses to fall 1.6 percent. []
Precious metals prices at 0557 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 929.45 -2.85 -0.31 5.60
Spot Silver 13.32 -0.07 -0.52 17.67
Spot Platinum 1169.50 -15.50 -1.31 25.48
Spot Palladium 243.00 -5.50 -2.21 31.71
TOCOM Gold 2862.00 -33.00 -1.14 11.23 14908
TOCOM Platinum 3611.00 -71.00 -1.93 36.16 6758
TOCOM Silver 409.20 -5.30 -1.28 28.16 150
TOCOM Palladium 750.00 -31.00 -3.97 36.36 153
Euro/Dollar 1.3966
Dollar/Yen 95.43
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Chikako Mogi; Editing by Edwina Gibbs)
