* Stock market rally hurts gold after Friday's 3-week high
* SPDR Gold holdings hit another record
By Risa Maeda
TOKYO, March 23 (Reuters) - Gold edged down on Monday as a
stock market rally reduced investors' gold demand after strong
gains last week on the Federal Reserve's move towards
quantitative easing.
But a consistent rise in holdings of gold-backed securities
meant a limited downside for gold below $950 per ounce for now,
traders said. The world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>, said its holdings hit a record
1,114.60 tonnes as of March 20, up 11.31 tonnes or 1 percent
from the previous day. []
Buying of gold by ETFs, which back the securities they
issue with physical stocks of bullion, has picked up pace since
the Federal Reserve announced plans to buy $300 billion in
longer-dated Treasuries on Wednesday, causing a fall in the
dollar and spurring inflation concerns.
SPDR alone has added 45.55 tonnes of gold to its reserves
since Wednesday.
But the Fed move as well as expectations that a U.S. plan
to rid banks of $1 trillion of toxic assets was closer to being
implemented fuelled optimism about the global economy, helping
send Asian stocks to a two-month high.
Spot gold <XAU=> was trading at $950.50 ounce at 0301 GMT,
versus New York's notional close of $950.90 on Friday, when it
rose as high as $966.70, its highest level since Feb. 25.
"A strong performance in stock markets usually soaks up
money, and gold is down today because of that," said Yuki
Sonoda, an adviser at Daiichi Commodities Co.
"It's a choice for investors between gold-backed securities
and equities, as they are similarly liquid and easy to access,"
he said.
Tokyo's Nikkei share average <> rose more than 2
percent to a six-week high, while U.S. stock futures <SPc1>
rose more than 1 percent in electronic trading. []
Last week gold rose 2.6 percent, the biggest weekly gain
since the week to Feb. 20, during which it briefly topped
$1,000.
U.S. gold futures for April delivery <GCJ9> fell $4.7 per
ounce to $951.50, adding to a $2.60 fall in the previous
session.
Net noncommercial long positions rose 3.9 percent to
150,395 lots in the week to March 17, a report by the U.S.
Commodity Futures Trading Commission showed, a sign of possible
profit-taking to follow after a volatile market last week.
Among other precious metals, spot platinum <XPT=> fell to
$1,097.50 an ounce in a retreat from a near six-month high of
$1,127.50 marked on Friday.
Precious metals prices at 0313 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 950.85 -0.05 -0.01 49.58
Spot Silver 13.76 0.04 +0.29 7.08
Spot Platinum 1097.50 -15.00 -1.35 -3.05
Spot Palladium 204.00 -0.50 -0.24 -38.55
TOCOM Gold 2950.00 61.00 +2.11 20.65
18972
TOCOM Platinum 3409.00 124.00 +3.77 -19.86
8080
TOCOM Silver 420.00 29.60 +7.58 -14.86
578
TOCOM Palladium 640.00 27.00 +4.40 -49.00
300
Euro/Dollar 1.3660
Dollar/Yen 96.43
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot price in $ per ounce.
(Additional reporting by Miho Yoshikawa; Editing by Michael
Urquhart)
