* Psychological resistance seen around $1,020/oz
* SPDR Gold holdings <XAUEXT-NYS-TT> inches up 0.1 pct
By Miho Yoshikawa
TOKYO, Oct 6 (Reuters) - Gold rose to $1,020 on Tuesday as
the dollar fell against the euro and crude oil maintained its
strength, although some resistance emerged around that level.
Purchases of bullion were picking up in India, a top consumer
of the precious metal, providing support for the market. Buying
traditionally typically increases in India during Diwali, the
Hindu festival of lights. []
Traders said U.S. gold futures remained vulnerable to a
sudden drop because of near record-high positions held by
speculators.
Spot gold <XAU=> rose 0.3 percent to $1,019.75 an ounce by
0520 GMT.
U.S. gold futures for December delivery <GCZ9> were at
$1,020.9 an ounce, also up 0.3 percent.
The dollar fell against the euro and the yen on Tuesday
after Britain's Independent newspaper reported that Arab states
were in talks to end the use of the dollar for oil trading.
[] []
The report also said the talks are centred on using a basket
of currencies, which included the yen, yuan, euro and gold.
Kazuhiko Saito, chief analyst at Fujitomi Co Ltd, said the
moves in currency markets and crude oil were providing support
for gold.
"There is considerable psychological resistance around
$1,020, however," he said, adding that buyers are likely to
recede at that level.
"Crude oil seems quite strong for the moment given that it
rose despite news that a Nigerian militant leader agreed to halt
fighting," he said.
Crude oil prices rose on Monday and remained above $70 per
barrel on Tuesday, boosted by hopes of an economic recovery and
despite news that the last prominent Nigerian militant leader
agreed to halt fighting in the oil-producing Niger Delta.
[]
Gold has historically gotten a boost from high oil prices as
some investors look to the metal as an inflation hedge.
Bank of America Merrill Lynch said on Monday gold prices will
hit $1,500 an ounce in 2011 when oil prices move back above $100
a barrel as emerging market growth creates shortages.
[]
Spot gold rose to $1,023.85 last month, just short of the
record high of $1,030.80 marked in March 2008.
Saito added, however, that crude oil prices were also
vulnerable to dips given that there were lingering doubts about
the strength of the global economic recovery.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,098.073
tonnes as of Oct. 5, up 0.1 percent or 1.525 tonnes from the
previous business day. []
Other precious metals also rose, with spot silver <XAG=> up
1.5 percent at $16.84 an ounce.
Platinum <XPT=> was up 0.2 percent at $1,296 per ounce and
palladium <XPD=> rose 0.2 percent to $299.
PRICES
Precious metals prices at 0520 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1019.60 2.95 +0.29 15.84
Spot Silver 16.84 0.25 +1.51 48.76
Spot Platinum 1296.00 3.00 +0.23 39.06
Spot Palladium 299.00 0.50 +0.17 62.06
TOCOM Gold 2931.00 19.00 +0.65 13.91 31982
TOCOM Platinum 3728.00 27.00 +0.73 40.57 8707
TOCOM Silver 482.00 12.70 +2.71 50.96 477
TOCOM Palladium 860.00 10.00 +1.18 56.36 197
Euro/Dollar 1.4722
Dollar/Yen 89.02
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 Edwina Gibbs)
