* Gold steady above $940; ETF holdings ease
* Dollar cuts gains vs basket of currencies <.DXY>
* Analysts eye corrective move lower for bullion
By Nick Vinocur
LONDON, June 29 (Reuters) - Gold rose to $942 per ounce on
Monday, clinging to recent gains in choppy trade as the dollar
cut earlier gains with renewed caution toward riskier assets
also proving supportive.
Gold <XAU=> was at $941.90 per ounce at 1059 GMT, up from
$938.05 quoted late in New York on Friday. The precious metal
earlier hit an intra-day high at $942.50 but is some way off a
two week high of $948.20.
A cautious approach to risk kept global stock market gains
in check, while crude <CLc1> held under $70 per barrel following
a bearish report on demand from the IEA, sapping gold's appeal
as a hedge against oil-induced inflation.
Analysts said the precious metal was holding onto its gains
in what was likely to be a week of quiet trading ahead of U.S.
non-farm payroll data due for release on Thursday.
"The $940 support level is holding well, but volumes are
thin and I think (trade) is going to remain quiet until the
middle of the week when non-farm data comes out," said Andrey
Kryuchenkov, an analyst at VTB capital.
DOLLAR STEADIES
The U.S. currency cut early gains, having earlier attempted
to shake off some of the effects from China's calls for a
super-sovereign global reserve currency. [] []
The case for a dollar alternative was undermined on Monday,
when the central bank governor of the United Arab Emirates told
Reuters that the prospect was difficult to contemplate and plans
to replace the dollar would not succeed. []
U.S. gold futures for August delivery <GCQ9> strengthen to
10 $942.6 per ounce, up 1 percent from $940.7 at the open.
Analysts also said the precious metal was due for a slight
correction after last week's rally.
"The price of crude oil is still below $70 per barrel, and
that (crude) has been key driver of inflation fears and also the
gold price," said Jesper Dannesboe, an analyst at Societe
Generale.
"We had the correction from $1,000 down to around $910, and
then another correction upwards. Now I think we're heading down
again," he added.
Reflecting concern that gold may have lost some of its
appeal to investors, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust <GLD>, said its
holdings remained at 1,125.74 tonnes as of June 26, when it fell
0.5 percent. []
It is currently down 0.7 percent from a record volume of
1,134.03 tonnes, marked on June 1.
Further undermining physical demand, ETF Securities said the
amount of gold it holds to back its Gold Bullion Securities
exchange-traded commodity fund had declined 567 ounces on June
26. []
Noncommercial net long U.S. gold futures positions fell 5.3
percent to 166,294 lots in the week to June 23 from 175,543 lots,
a weekly report by the U.S. Commodity Futures Trading Commission
showed. []
In other precious metals markets, spot silver <XAG=> firmed
to $14.07 per ounce, up from $14.06 quoted late in New York on
Friday, while platinum dropped to $1,185.50 and palladium rose
slightly to $245.50.
(Reporting by Nick Vinocur, additional reporting by Miho
Yoshikawa; Editing by Veronica Brown)
