* Investors eye Greece after credit rating downgrades
* U.S. gold futures rise
* SPDR holdings rise
(Recasts, changes dateline to LONDON from TOKYO)
By Rebekah Curtis
LONDON, Dec 21 (Reuters) - Gold steadied after multiweek
lows on Monday, lacking momentum as the dollar held near
three-month highs, with the currency partly underpinned by
concerns about debt problems in Dubai and Greece.
Last week gold fell below a psychological support level of
$1,100 to a six-week low of $1,094.50, losing grip of a record
high above $1,226 hit on Dec. 3.
Gold eked out modest gains, trading at $1,113.10 an ounce at
1038 GMT, versus $1,112.25 an ounce late in New York on Friday
when bullion rose.
"The dollar's been going through a bout of strength in
recent weeks and that's been keeping the market pinned down,"
said Standard Chartered analyst Daniel Smith in London.
A firmer dollar usually curbs gold's appeal as an
alternative investment and makes the precious metal more
expensive for holders of other currencies. <.DXY>
"People have started to see reasons for being long in the
dollar again," Smith said, adding that concerns over debt
problems in Dubai and Greece are helping to boost the currency.
[]
Investors are keeping an eye on Greece after two credit
ratings agencies downgraded the euro zone member this month on
concerns about its fiscal health. []
FUTURE'S GOLD
U.S. gold futures for February delivery <GCG0> inched up 0.2
percent to $1,113.80 per ounce, compared to Friday's settlement
of $1,111.50 an ounce on the COMEX division of the New York
Mercantile Exchange.
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.
Meanwhile, 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. []
Silver was at $17.33 an ounce from $17.26 and platinum
<XPT=> was at $1,431 from $1,427.50. Palladium <XPD=> was at
$366 from $359.50.
"We now believe the probable year-end gold price will be
around $1,050," Commerzbank said in a note.
"The other precious metals, particularly silver, are likely
to follow in gold's wake, albeit with a wider volatility range,
and to ease in the next few days in the absence of any
significant upward pressure from the U.S. dollar."
(Editing by Keiron Henderson)
