* Bullion gains support from FOMC meeting
* SPDR holdings unchanged
* Recent dollar weakness supports bullion
By Rebekah Curtis
LONDON, Sept 24 (Reuters) - Gold ticked higher on Thursday,
supported by recent dollar weakness and as risk-averse investors
sold equities ahead of the Group of 20 summit meeting.
Spot gold stood at $1,013.5 an ounce by 0920 GMT, from
$1,007.05 quoted late in New York on Wednesday <XAU=>. Prices
remain within sight of last week's 18-month high at $1,023.85
and the March 2008 historic peak at $1,030.80.
"We think the dollar's going to continue to weaken and that
should help gold stay around the $1,000 mark," Citigroup analyst
David Thurtell said.
Supporting bullion, the dollar retreated against
higher-yielding currencies. Investors shifted funds from the
U.S. currency after the Federal Reserve bolstered expectations
interest rates will stay very low for a long time.
The Federal Reserve on Wednesday upgraded its assessment of
the U.S. economy and held benchmark overnight lending rates at
close to zero percent. []
"On balance, the FOMC rate decision and statement were
gold-friendly," HSBC said in a note.
"In an important aspect for gold, the Fed said that it will
gradually slow the pace of mortgage-backed securities purchases,
and that it is monitoring closely the size and composition of
its balance sheet to adjust credit and liquidity."
But the HSBC note also voiced concern about the FOMC
statement estimating long-term inflation will stay subdued, as a
low inflation climate is historically negative for gold prices.
Gains in gold were modest however, with sentiment partly
dampened by weakness in oil prices <CLc1>.
HEDGE AGAINST RISK
Bullion was also buoyed by its status as a hedge against
risk, as cautious investors dropped equities ahead of the
two-day G20 summit in Pittsburgh starts on Thursday.
The timing for plans to unwind emergency economic support is
a key issue for investors as the G20 leaders seek ways to
nurture the recovery from the recession and build safeguards
against future catastrophes. []
Some analysts added that gold drew support from resilient
demand in the physical market in Asia.
"Despite the high prices the physical demand seems to be
recovering a bit. Together with higher investment interest, it's
providing a good picture," said Eugen Weinberg, an analyst at
Commerzbank.
India's gold purchases have picked up as the festive season
gained steam in the world's largest consumer.
"At the moment we see signs of scarcity in some places," he
said of the Asia region. "Normally gold is not something which
is really scarce. It's surprising that some places need to wait
some weeks for their deliveries."
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,101.735
tonnes as of Sept 23, unchanged from the previous business day.
Among other precious metals, silver <XAG=> traded at $16.78
from $16.71, platinum was at $1,319 from $1,318.5 and palladium
was at $293 from $292.
(Editing by Keiron Henderson)
