* Gold steadies as rise in equities, dollar pauses
* SPDR holdings nudge up 10.7 tonnes to hit record peak
By Chikako Mogi
TOKYO, March 25 (Reuters) - Gold steadied on Wednesday as a
rally in equities stalled and dollar-selling eased, with a
fresh record in the holdings of the world's largest gold-backed
exchange-traded fund confirming healthy demand.
Gold has been weighed down in recent days as the U.S.
government's drive to clean up bad loans held by banks fuelled
some optimism about the banking system and the economy.
President Barack Obama said on Tuesday he saw signs of
progress in his drive to lead the United States out of the
economic crisis. []
Gold <XAU=> was at $925.60 per ounce at 0630 GMT, little
changed from New York's notional close of $925.65 on Tuesday,
when it fell nearly 2 percent on fund selling and a stronger
dollar.
"In times of uncertainty, even if equities stage an
impressive rally like in the past week, gold continues to be
looked at as an asset investors want to hold," said a
Singapore-based trader.
A recent run-up in equities has led investors to book
profits in gold and shift some funds to stocks, leading to a
dip in gold ETFs. But traders said a lack of clear evidence of
an economic recovery kept support intact for the gold market.
Bullion has recovered about 5 percent from a six-week low
of $882.90 hit on March 18, but is still more than 7 percent
shy of the 11-month high above $1,000 set in February.
It soared to an all-time peak of $1,030.80 in March 2008.
"With equities, the dollar and euro holding steady, gold is
in a narrow $3 range. A lot will depend on the equities market.
If it rallies in New York today, gold could test the support of
$915, and if that is broken, more liquidation could push it
towards $900," the trader said.
Gold is currently enjoying support from investors viewing
the yellow metal as a good hedge against both inflation and
deflation, keeping prices in a relatively narrow range, traders
said.
"Gold is taking its cues from equities as signs of some
asset reallocation into equities are emerging, but fund
outflows are limited as investor perception of gold as a
valuable long-term investment in unstable times hasn't
changed," said a general manager at a Japanese mining firm.
Holdings of the SPDR Gold Trust <GLD> rose to a record
1,124.99 tonnes on March 24, up 10.7 tonnes from the day
before.
The previous record was 1,114.60 tonnes marked on March 20.
[]
"ETFs continue to accumulate longs, so any dip in gold
prices would be well supported," the trader said.
For details on the gold holdings of the ETF listed in New
York and co-listed on other exchanges, click:
http://www.exchangetradedgold.com/iframes/usa.php
For a graphic, click:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD240309.jpg
Tokyo shares ended down 0.1 percent on Wednesday, tracking
U.S. stocks, which dropped the previous day as investors paused
to reassess the U.S. government's bank plans. []
The dollar fell 0.3 percent against the yen on Wednesday
after rising the day before. []
Gold is often viewed as an alternative to holding the
dollar, rising when the greenback falls. A weaker dollar also
makes gold less expensive for holders of other currencies.
Prices as of 0635 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 924.50 -1.15 -0.12 5.04
Spot Silver 13.31 -0.09 -0.67 17.58
Spot Platinum 1121.00 7.00 +0.63 20.28
Spot Palladium 205.50 0.00 +0.00 11.38
TOCOM Gold 2914.00 -47.00 -1.59 13.25
36603
TOCOM Platinum 3534.00 -47.00 -1.31 33.26
8697
TOCOM Silver 414.00 -9.00 -2.13 29.66
260
TOCOM Palladium 655.00 -16.00 -2.38 19.09
329
Euro/Dollar 1.3480
Dollar/Yen 97.44
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 Lincoln
Feast)
