* Gold in ranges before U.S. rate decision
* SPDR Gold holdings unchanged at 1,111.922 tonnes
By Chikako Mogi
TOKYO, Jan 26 (Reuters) - Gold inched above $1,100 an ounce
on Tuesday as recent sharp losses offered some bargain hunting
incentives, but key events including a U.S. interest rate
decision later in the week kept investors cautious.
The gold market has stabilised from Friday's fall to a near
five-week low of $1,081.90 when news of President Barack Obama's
proposal to limit financial risk-taking hit the broader
commodities markets.
With speculative positions in futures also falling, traders
said the market could appear attractive to investors at current
levels.
But investors were cautious about actively buying as the
dollar, the main driver for the gold market, lacked clear
direction. They were also waiting for key events including the
Federal Reserve's interest rate decision and the State of the
Union address by Obama, both on Wednesday.
"The market does not have much interest (in activity) ahead
of the Fed rate decision," said Louis Lok, a senior dealer at
Bank of China in Hong Kong, adding that gold prices were likely
to stay in ranges between $1,085 and $1,110 until the rate
outcome.
After wide-ranging trade last week and a correction from
gold's high prices, some physical buying has been cited this
week, he said.
"Especially with the market stabilising, some people may now
have confidence to collect some gold at lower price levels. This
may be a good opportunity over the medium term," Lok said.
Spot gold <XAU=> inched up 0.3 percent to $1,101.75 per ounce
as of 0225 GMT, compared to New York's notional close of
$1,097.95.
U.S. gold futures for February delivery <GCG0> rose 0.6
percent to $1,101.70 per ounce, compared to $1,095.70 an ounce on
the COMEX division of the New York Mercantile Exchange.
Spot platinum <XPT=> was at $1,556.50 per ounce while spot
palladium <XPD=> was at $440.00.
Platinum and palladium, valued for their use in automobile
catalytic converters, have been rising and hit multi-month highs
last week on strong demand for U.S.-based exchange-traded funds
backed by the metals launched earlier this month.
Holdings of ETF Securities' U.S.-based platinum
exchange-traded fund <PPLTiv.P> rose 10 percent on Friday, while
those of its U.S. palladium product <PALLiv.P> climbed by a
third, the company said on Monday. []
In contrast, the gold market's sluggishness was reflected in
holdings at the world's largest gold-backed exchange-traded fund,
SPDR Gold Trust <GLD>, which stayed unchanged from the previous
business day at 1,111.922 tonnes as of Jan. 25. []
The dollar was steady on Tuesday, holding on to gains made
against the yen the previous day when news that Bernanke had
edged closer to winning support for a second term helped ease
anxiety among investors.
Strong demand in Greece's five-year debt sale eased concerns
about fiscal problems in the euro zone, lending the euro some
modest support against the dollar. []
Currency market reaction was muted when administration
officials said on Monday that Obama will seek a three-year freeze
on domestic spending in his 2011 budget that would save $250
billion by 2020.
He will outline the spending hold-down in his State of the
Union address on Wednesday. []
PRICES
Precious metals prices at 0225 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1101.30 3.35 +0.31 0.51
Spot Silver 17.18 0.06 +0.35 2.08
Spot Platinum 1555.50 9.00 +0.58 6.03
Spot Palladium 440.00 -1.00 -0.23 8.51
TOCOM Gold 3211.00 4.00 +0.12 -1.47 34597
TOCOM Platinum 4524.00 21.00 +0.47 3.26 11760
TOCOM Silver 50.60 0.30 +0.60 -2.13 455
TOCOM Palladium 1280.00 14.00 +1.11 9.87 216
Euro/Dollar 1.4164
Dollar/Yen 90.40
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Michael Watson)
