* Buying subdued with investors aware of downside risk
* SPDR Gold holdings up 0.5 percent on Friday
By Risa Maeda
TOKYO, Dec 21 (Reuters) - Gold prices were little changed on
Monday with gains capped by the dollar's firmness and a
technically bearish picture in the short term in light trading
ahead of the Christmas holidays.
Spot gold <XAU=> was almost flat at $1,112.05 an ounce as of
0556 GMT compared to New York's notional close of $1,112.25.
Last week gold fell below a psychological support of $1,100
to a six-week low $1,094.50 before gaining some ground.
It had risen as high as $1,118.70, still about 9 percent
below the record above $1,220 marked on Dec. 3.
"The momentum of gold is not so strong, and that underscores
a subdued buying appetite among investors," said Shuji Sugata,
research team manager at Mitsubishi Corp Futures Ltd.
"That's partly because of the holiday season and also because
technically people still expect a downside risk in the short
term," he said.
U.S. gold futures for February delivery <GCG0> inched up 0.3
percent to $1,114.50 per ounce, compared to Friday's settlement
of $1,111.50 an ounce on the COMEX division of the New York
Mercantile Exchange.
In the currency market, the dollar dipped against the euro on
Monday but still hovered near its highest point in more than
three months as currency players anticipated more short-covering
in the greenback in a holiday-shortened week.
Investors, who sold the U.S. currency for most of 2009, have
been buying it back as the year-end nears. []
Strength in the dollar usually curbs gold's appeal as an
alternative investment, making the precious metal more expensive
for holders of other currencies.
Gold prices rose on Friday, reversing declines in a choppy
session, but buying related to short-covering, inflation worries
and geopolitical tensions trumped selling prompted by
profit-taking and a strong dollar.
Gold's appeal as a safe-haven play came into focus after news
spread of a dispute between Iran and Iraq, lifting oil prices as
well, which was also supportive for gold as a hedge against
inflation.
Iranian troops who had taken over an oil well in a remote
region along the Iran-Iraq border last week have partially
withdrawn from the disputed oil area, an Iraqi government
spokesman said on Sunday. []
Noncommercial net long U.S. gold futures positions rose 0.7
percent to 256,108 lots in the week to Dec. 15 from 254,429 lots,
a weekly report by the U.S. Commodity Futures Trading Commission
showed. []
The week-on-week rise was the first in three weeks, during
which net long positions had fallen from a record marked in the
week ended on Nov. 24 of 262,331 lots.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,126.611 tonnes as
of Dec. 18, up 6.097 tonnes or 0.5 percent from the previous
business day. Holdings hit a record high of 1,134.03 tonnes on
June 1. []
Precious metals prices at 0611 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1111.55 -0.70 -0.06 26.29
Spot Silver 17.32 0.06 +0.35 53.00
Spot Platinum 1426.50 -1.00 -0.07 53.06
Spot Palladium 363.50 4.00 +1.11 97.02
TOCOM Gold 3241.00 41.00 +1.28 25.96 58675
TOCOM Platinum 4160.00 21.00 +0.51 56.86 8542
TOCOM Silver 508.80 7.20 +1.44 59.35 311
TOCOM Palladium 1066.00 20.00 +1.91 93.82 168
Euro/Dollar 1.4331
Dollar/Yen 90.38
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 Chikako Mogi; Editing by Michael
Watson)
