* Dollar seen sticking to tight range ahead of Fed
* Oil ticks higher, other commodities steady
(Updates prices)
By Jan Harvey
LONDON, June 19 (Reuters) - Gold steadied on Friday as the
dollar index reversed earlier losses, but trading was muted as
the U.S. currency remained hemmed into ranges ahead of a Federal
Reserve meeting next week.
Spot gold <XAU=> was bid at $932.90 an ounce at 1420 GMT,
against $932.35 an ounce late in New York on Thursday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange eased 70 cents to $933.90 an ounce.
Prices awaited new direction from the currency markets,
currently the main driver of gold. Gold becomes cheaper for
holders of other currencies as the U.S. dollar slips.
"If you are looking at the ups and downs of gold in its
narrow trading range, it is more or less a reflection of the
swings in the euro/dollar exchange rate," said Peter Fertig, a
consultant at Quantitative Commodity Research in Germany.
The dollar <.DXY> fell broadly as improved U.S. data fuelled
hopes of an economic recovery. It later pared gains against a
basket of currencies, however. []
Moves in the currency remained limited ahead of a two-day
Fed policy meeting next week. As long as the currency markets
remain rangebound, gold will also be hemmed in.
Factors such as jewellery buying, safe-haven demand and
inflation hedging are all likely to remain subservient to the
influence of currencies, analysts said.
"Inflation expectations are not there just yet, and the
precious metal could see even more losses if equities bounce
back up," VTB Capital said in a note.
"Gold's attractiveness as a safe haven asset is virtually
zero at the moment, which is evident from the unchanged
speculative positions in gold futures or ETFs (exchange-traded
funds)," it added.
On other markets, European shares extended gains early
afternoon, while U.S. stocks opened higher as appetite for
equities picked up. Oil firmed a touch after bullish economic
data helped the demand outlook. [] []
WIDER MARKETS
Holdings of the major gold exchange-traded funds were
stable, as investors awaited clues from the wider markets.
Another wave of bad news on the economy could unleash new
inflows, however, analysts said. []
The U.S. Senate signalled its approval of a long-planned
sale of just over 400 tonnes of gold by the International
Monetary Fund on Thursday. []
UBS analyst John Reade said in a note: "There are lots of
uncertainties regarding the sale but we do not expect this to be
a negatively disruptive factor to the gold market."
"If the gold is taken by other official sector buyers (it)
could be a very positive development for the market," he added.
Silver <XAG=> was at $14.22 an ounce against $14.19.
Platinum <XPT=> was at $1,206 an ounce against $1,200, and
palladium <XPD=> at $240.50 against $238.
ETF Securities said holdings of its ETFS Physical Palladium
fund <PHPD.L> rose to a record on Thursday, up just over 3,000
ounces or 1 percent to 315,572 ounces. The fund's reserves are
up 10,000 ounces or 3.3 percent week-on-week. []
(Editing by William Hardy)
