* China gold reserves at 1,054 tonnes
* Gold keeps gains above $900, ETF further away from record
* Investor risk appetite up but no big position shift yet
* Gold supported as financial and economic worries persist
By Chikako Mogi
TOKYO, April 24 (Reuters) - Gold rose 1 percent to a
three-week high on Friday after China said it had been buying
the precious metal for its reserves, confirming speculation it
has been bulking up its reserves and raising hopes of more
purchases to diversify its massive foreign exchange holdings.
The government has 1,054 tonnes of gold in its reserves, up
454 tonnes tonnes since 2003, Hu Xiaolian, head of the State
Administration of Foreign Exchange (SAFE), said. This makes it
the fifth biggest country holder. []
"They have a long way to go. Look at the size of their
reserves. They should probably double it at least," Jonathan
Barratt, managing director of Commodity Broking Services in
Sydney, said.
Others said the increase suggests that despite fluctuations
in the gold price, including a record high last year, China had
remained a steady buyer, although it may only have been buying
at periods of lower prices.
"This suggests the possibility that China will
significantly boost the proportion of gold in its reserves,"
said Shuji Sugata, a manager in the research team at Mitsubishi
Corp Futures & Securities in Tokyo.
Spot gold <XAU=> rose to $910.90 per ounce by 0528 GMT, up
1 percent from New York's notional close of $902.00. It has
risen 5 percent so far this week, putting it on track for the
biggest weekly gain for two months.
Prices have also been by physical demand from India, the
world's largest consumer, ahead of the Akshaya Tritya festival
on April 27, an auspicious time for gold buying.
Bullion's appeal as a safe-haven asset remains intact due
to persistent worries about the global economy and financial
sector, but price gains have capped by signs of a slight
improvement in corporate and economic activity in the United
States and China.
Holdings at the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <XAUEXT-NYS-TT>, fell to 1,104.45
tonnes as of April 23, down 1.53 tonnes or 0.1 percent from the
previous day. []
A 44 percent surge in SPDR's holdings since the start of
the year had helped underpin gold prices, but the last increase
was nearly a month ago.
Low interest rates globally are helping to bolster
financial strength for banks and securities firms, but consumer
demand was still slack, limiting rises in stocks and keeping
risk aversion alive, traders said.
Key U.S. data including March durable goods orders and new
home sales are scheduled for release later on Friday.
Precious metals prices at 0525 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 911.05 9.05 +1.00 3.51
Spot Silver 12.81 0.07 +0.55 13.16
Spot Platinum 1176.00 -2.50 -0.21 26.18
Spot Palladium 232.00 1.50 +0.65 25.75
TOCOM Gold 2854.00 18.00 +0.63 10.92
20998
TOCOM Platinum 3690.00 -35.00 -0.94 39.14
12407
TOCOM Silver 397.50 7.70 +1.98 24.49
257
TOCOM Palladium 733.00 -5.00 -0.68 33.27
339
Euro/Dollar 1.3174
Dollar/Yen 97.11
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 Miho Yoshikawa; Editing by Michael
Urquhart)
