* Dip buying by funds help snap four-session losing streak
* Demand picks up in U.S. physical gold, silver ETFs
* SPDR gold ETF holdings steady after heavy outflow
(Recasts, updates prices, market activity to close; adds
second byline, dateline, previously LONDON)
By Frank Tang Jan Harvey
NEW YORK/LONDON, Dec 10 (Reuters) - Gold rose on Thursday,
snapping a four-session losing streak as institutional
investors and exchange-traded funds added positions after
bullion retreated from record highs last week.
A steady U.S. dollar also improved gold market sentiment.
Earlier this week, bullion investors braced for the dollar to
surge against other currencies amid worries about sovereign
debts in Spain, Greece and possibly other countries.
William Rhind, strategic director of ETF Securities' U.S.
unit, said he noted a big pick-up in demand for both of the
company's U.S. physical gold <SGOL.P> and silver ETFs <SIVR.P>
as bullion prices fell.
"We are seeing more fund buying, and the Indian jewelry
demand has picked up. People are using these opportunities to
get back into the market," said Rhind, whose London-based
company manages more than 130 exchange-traded products around
the world with more than $17 billion in assets.
Spot gold <XAU=> was at $1,130.60 an ounce at 3:10 p.m. EST
(2010 GMT), up from $1,128.80 late in New York on Wednesday.
U.S. gold futures for February delivery <GCG0> settled up
$5.30 to $1,126.20 an ounce on the COMEX division of the
NYMEX.
Analysts said it will probably be January before gold
revisits record highs at $1,226.10 an ounce that it hit a week
ago, although they believe the upward trend in gold is intact.
"Year-end considerations, book squaring, argue for further
dollar strength, which will keep gold under pressure," said
Calyon analyst Robin Bhar.
"As we go into the new year, with fresh allocations, gold
is one of the commodities that will be in favor due to a whole
host of longer-term positive factors."
Further losses in the dollar would boost gold's appeal as
an alternative asset, and make dollar-priced commodities
cheaper for holders of other currencies.
The dollar was largely flat after initially falling against
the euro on a narrower-than-expected U.S. trade deficit for
October and some improvement in U.S. jobless claims. []
Private banking group Pictet said on Thursday that gold was
one of its preferred picks for 2010. []
UNCERTAINTY REIGNS
Fears over the economic outlook and sovereign debt will
also continue to support gold, analysts said.
Bud Conrad, chief economist at Casey Research, said gold
fell earlier this week on follow-through selling following a
sharp pullback last Friday.
"We are nowhere near through the long-term bull-market run
in gold. In fact, pullbacks should be seen as a good buying
opportunity," Conrad said.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust, said its holdings were unchanged on Wednesday
after an outflow of nearly 14 tonnes a day before, their
biggest drop since July. []
In supply news, South Africa, a major gold producer, said
its output of the precious metal fell 5.8 percent year-on-year
in October. []
Meanwhile platinum <XPT=> was at $1,122 an ounce against
$1,416.50, while palladium <XPD=> was flat at $362 compared
with Wednesday's finish. Silver <XAG=> was at $17.37 an ounce
against $17.38.
Close Change Pct 2008 YTD
Chg Close % Chg
US gold <GCG0> 1126.20 5.3 0.5 884.3 27.4
US silver <SIH0> 17.188 0.008 0.0 11.295 52.2
US platinum <PLF0> 1424.50 15.30 1.1 941.50 51.3
US palladium <PAH0> 365.10 -0.45 -0.1 188.70 93.5
Prices at 3:25 p.m. EST (2025 GMT)
Gold <XAU=> 1130.75 1.95 0.2 878.20 28.8
Silver <XAG=> 17.38 0.00 0.0 11.30 53.8
Platinum <XPT=> 1421.50 5.00 0.4 924.50 53.8
Palladium <XPD=> 362.00 0.000 0.0 184.50 96.2
Gold Fix <XAUFIX=> 1128.50 2.75 0.2 836.50 34.9
Silver Fix <XAGFIX=> 17.39 -38.00 -2.1 14.76 17.8
Platinum Fix <XPTFIX=> 1416.00 3.00 0.2 1529 -7.4
Palladium Fix<XPDFIX=> 365.00 1.00 0.3 365.0 0.0
(Reporting by Frank Tang in New York and Jan Harvey in London;
Editing by David Gregorio)
