* Spot gold up 0.5 percent at $917.10 per ounce <XAU=>
* Bullion supported by dollar weakness, steadying shares
* ETF holdings stable; $885-$930 range eyed
(Updates prices)
By Veronica Brown
LONDON, May 12 (Reuters) - Gold was firmer on Tuesday,
reflecting some discomfort with a rally in so-called riskier
assets, with dollar weakness helping to prop up the metal's
appeal as an alternative investment.
Spot gold <XAU=> stood at $917.10 per troy ounce by 1437 GMT
compared with $912.60 quoted late in New York on Monday. It hit
its highest since April 2 earlier this month at $925.15.
Bullion found support as the U.S. currency fell to a
four-month low against a basket of currencies, making
dollar-priced gold cheaper for non-U.S. buyers as investors
latched on to the traditional dollar-gold inverse correlation.
The rally in bullion -- often used as a hedge against market
uncertainty and sometimes as a barometer of investor attitudes
toward risk -- also came as oil and stock markets rose in the
hope that the global economic slump may have bottomed out.
[]
World shares, measured by MSCI's all-country index, steadied
after hitting a six-month high on Monday <.MIWD00000PUS>. Oil
moved to its highest this year <CLc1>.
Analysts have said gold prices are trapped between opposing
forces as its role as a hedge against economic uncertainty vies
with perceptions that the economic downturn might be moderating.
"There's a lot of uncertainty still even though we have seen
'green shoots' rallies in equities, but is that the start of a
recovery or a bounce in an otherwise bear trend? This is the
great unknown," said James Moore, analyst at TheBullionDesk.com.
"We've still got a little way further to go before we have a
clear idea on things," he added.
Simon Weeks, director of precious metals sales at Scotia
Mocatta in London, also said the market had benefitted as
markets try to work out whether the downturn has moderated but
saw gold stuck in familiar territory during that process.
"I wouldn't expect us to break out of the broader $885-930
range at the moment -- in a thin market like this when the
dollar is weak then people look for gold to move higher," he
added.
ETF HOLDINGS STABLE
U.S. gold futures for June delivery <GCM9> rose $4.10 to
$917.60 after settling down $1.40 on Monday on the COMEX
division of the New York Mercantile Exchange.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said holdings stood at 1,104.09 tonnes as
of May 11, unchanged from the previous business day. []
Silver tracked gains in gold, rising to $14.11 an ounce
<XAG=> from $13.91 late in New York on Monday.
ETF Securities said its silver-backed ETF <PHAG.L> saw an
inflow of more than 700,000 ounces on Monday, lifting its total
holdings by 3.9 percent to a record 18.702 million ounces.
[]
The company's head of research Nicholas Brooks said silver
was benefiting along with other industrial precious metals from
expectations the economic downturn may be bottoming out.
"People are looking at silver as a precious metal, but also
a play on the cyclical upturn," he said. "It is really getting a
substantial boost, and we are starting to see that in our ETC
inflows."
Among other precious metals, spot platinum <XPT=> rose to
$1,120 from $1,114.50 and spot palladium <XPD=> was at $233 from
$233.50.
(Additional reporting by Jan Harvey; editing by William Hardy)
