*Gold underpinned by view that U.S. rates to stay low
*SPDR Gold holdings rise to level last seen in July
By Risa Maeda
TOKYO, Nov 10 (Reuters) - Gold eased off a record high above
$1,110 on Tuesday as a pause in the dollar's decline prompted
investors to lock in profits made on the precious metal.
But expectations that U.S. interest rates will likely stay
low have provided firm support and gold holdings for the world's
biggest gold-backed exchange-traded fund, SPDR Gold Trust,
climbed to a level not seen since July, with investors looking at
bullion as an alternative asset to the dollar.
Bullion hit a high of $1,110.85 per ounce on Monday --
setting a record for the fourth time in five trading sessions,
during which it rose more than $50.
Spot gold <XAU=> was trading at $1,099.10 per ounce at 0540
GMT, down 0.4 percent from New York's notional close of
$1,103.85.
U.S. gold futures for December delivery <GCZ9> were at
$1,099.50 an ounce, down 0.2 percent from Monday, when the
contract rose $5.70 to $1,101.40. The December contract hit a
record of $1,111.70 on Monday.
But some market participants pointed to the likelihood of a
correction towards $1,090-$1,080 per ounce.
"A correction is reasonable after the run-up from around
$1,030 in a little over a week," said Kaname Gokon, deputy
general manager in the research section of Japanese commodity
brokerage Okato Shoji Co.
"But gold will keep looking north," he said, adding that
borrowing costs for the dollar at near zero would keep
encouraging investors to use it for funding carry trades in
higher-yielding assets, including gold.
The Federal Reserve last week stuck to its commitment to keep
borrowing costs near zero for "an extended period" and investors'
views on interest rates were little changed by a G20 meeting and
U.S. unemployment data.
"Gold is also benefiting from the world of a zero-yielding
dollar," said Gokon. "Some people buy higher-yielding currencies,
such as Australian and New Zealand dollars. Others prefer buying
gold without taking currency risks."
Gold has risen 25 percent in the year to date, while an index
of the dollar against six major currencies <.DXY> has fallen 27
percent during the same period.
Gold holdings held by the SPDR Gold Trust <GLD> rose by a
little over 6 tonnes to 1,114.443 tonnes, marking the first
increase since Nov. 3. []
Precious metals prices at 0538 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1099.00 -4.85 -0.44 24.87
Spot Silver 17.41 -0.16 -0.91 53.80
Spot Platinum 1348.00 -9.50 -0.70 44.64
Spot Palladium 330.00 -1.00 -0.30 78.86
TOCOM Gold 3186.00 -24.00 -0.75 23.82 59284
TOCOM Platinum 3912.00 -12.00 -0.31 47.51 9443
TOCOM Silver 504.10 -7.60 -1.49 57.88 346
TOCOM Palladium 960.00 -2.00 -0.21 74.55 408
Euro/Dollar 1.4968
Dollar/Yen 89.83
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Miho Yoshikawa; Editing by Michael
Watson)
