* Gains capped as funds seen preparing to move away from gold
* SPDR Gold holdings up 0.304 tonnes on Monday
By Risa Maeda
TOKYO, Dec 15 (Reuters) - Gold prices firmed on Tuesday as
the dollar stayed weak on improved risk tolerance after concerns
eased about Dubai's debt woes.
Investors were bracing for comments by the U.S. Federal
Reserve, which starts its two-day meeting later in the day and
which will likely repeat a pledge to keep interest rates near
zero for an extended period, even as it makes a nod to signs of
economic recovery. []
Spot gold <XAU=> stood at $1,128.70 per ounce, up 0.2 percent
from New York's notional close of $1,126.20. It hit a four-week
low of $1,109.10 on Friday.
Investors are mostly taking a wait-and-see attitude as the
impact on currencies from the FOMC (Federal Open Market
Committee) meeting remains to be seen, Eli Owaki, an economist at
Nomura Securities Co, said.
"There is focus on how currencies will react after the FOMC
meeting. If the Fed's positive assessment on the economy spurs
unwinding of dollar shorts and a further return of money into
stocks, that would be negative for gold," Owaki said.
News on Monday of Abu Dhabi's surprise move to throw Dubai a
$10 billion lifeline to repay debts had cheered global equity
markets. []
But Japan's Nikkei share average <> edged down on
Tuesday and the dollar was subdued, with most markets eyeing the
FOMC meeting. [] []
Gains in gold were limited as when prices broke through
$1,100-$1,200, this was mainly driven by buying from fund
managers that are more committed to growth investments when they
are confident on the economic outlook, Owaki continued.
"Such investors must have felt shaky at $1,200-$1,300, and
they have been liquidating gold positions," she added.
Spot gold is trading about $100 below a record high of
$1,226.10 reached on Dec. 3.
U.S. gold futures for February delivery <GCG0> rose 0.5
percent to $1,129.50 per ounce. Futures were also off about $100
from a record peak of $1,227.50 hit on Dec. 3.
The FOMC meeting ending on Wednesday will mark a year since
the U.S. central bank cut benchmark interest rates to near zero
to combat the worst economic slump in decades.
A year later, the world's biggest economy has broadly
recovered, but employment is still lagging.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings rose 0.304 tonnes on Monday,
marking the first rise since Dec. 3. []
Precious metals prices at 0303 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1128.25 2.05 +0.18 28.19
Spot Silver 17.39 0.03 +0.17 53.62
Spot Platinum 1446.25 2.75 +0.19 55.18
Spot Palladium 365.15 0.65 +0.18 97.91
TOCOM Gold 3229.00 7.00 +0.22 25.50 40537
TOCOM Platinum 4140.00 34.00 +0.83 56.11 6035
TOCOM Silver 500.90 2.90 +0.58 56.87 151
TOCOM Palladium 1048.00 -2.00 -0.19 90.55 209
Euro/Dollar 1.4647
Dollar/Yen 88.69
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Joseph Radford)
