PRECIOUS-Gold inches up, faces resistance as ETF buys stall

                                
 * Investor demand tested as ETF buying stalls
                                
 * Support holds as financial and economic worries persist
                                
 * Prices seen capped at $900, supported around $865
                                
 By Chikako Mogi
                                
 TOKYO, April 23 (Reuters) - Gold nudged up on Thursday,
adding to gains from the previous session on concern about the
global economy and the financial sector, as well as physical
buying in India, the world's largest consumer.
                                
 But the market lacked momentum to push towards the key $900
mark, weighed down by stalling investment in the world's
largest gold-backed exchange-traded fund.
                                
 Gold <XAU=> was trading at $891.50 per ounce at 0230 GMT,
up 0.3 percent from the notional close in New York of $889.15.
On Wednesday, it rose 0.8 percent.
                                
 Gold last closed above $900 on April 2 and fell as low as
$864.00 on Friday, its lowest since Jan. 23.
                                
 "The market is rising slightly but I don't think it will
break above $900, which has become a critical level," said Y.H.
Chan, deputy manager at Bank of China in Hong Kong.
                                
 "The market is still in a bearish trend," he said, adding
that it could test $865 again, at which point physical demand
may pick up steam.
                                
 Buying from India ahead of the Akshaya Tritya festival on
April 27, an auspicious time for gold buying, continues to lend
support.
                                
 Also, while some risk appetite has returned in recent weeks
with stocks recovering from their lows, investor preference for
gold as a safe-haven asset remained intact, traders said.
                                
 The International Monetary Fund on Wednesday slashed its
growth forecasts for every major country and urged governments
to take forceful action to ensure the world economy's recovery
from a severe recession. [ID:nN21500818]
                                
 And U.S. banking woes continue, with Morgan Stanley <MS.N>
posting a wider-than-expected quarterly loss on Wednesday and
slashing its dividend. [ID:nN22534760]
                                
 One factor weighing on market sentiment was that the
holdings of the SPDR Gold Trust <XAUEXT-NYS-TT> have stayed at
1,105.98 tonnes, after investor outflows early this week
reached their biggest since early September. [GOL/SPDR]
                                
 A 44 percent surge in the ETF's holdings since the start of
the year had helped underpin gold prices, but the last increase
was nearly a month ago.
                                
 "The ETF has a strong impact on gold prices. The market is
very quiet, as the holdings remain unchanged," Chan said.
 PRICES
 Precious metals prices at 0240 GMT
 Metal             Last    Change  Pct chg  YTD pct chg
Turnover
 Spot Gold         891.60    2.45   +0.28      1.30
 Spot Silver        12.40    0.12   +0.98      9.54
 Spot Platinum    1162.50   -6.00   -0.51     24.73
 Spot Palladium    229.50   -0.50   -0.22     24.39
 TOCOM Gold       2815.00    6.00   +0.21      9.41      
11201
 TOCOM Platinum   3663.00   29.00   +0.80     38.12       
6987
 TOCOM Silver      389.00    9.60   +2.53     21.83        
227
 TOCOM Palladium   727.00   13.00   +1.82     32.18        
227
 Euro/Dollar       1.2988
 Dollar/Yen         97.75
 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 Risa Maeda; Editing by Michael
Urquhart)