* Gold seen likely range-bound ahead of holidays
* SPDR Gold holdings steady at 1,116.551 tonnes
By Miho Yoshikawa
TOKYO, Dec 16 (Reuters) - Gold prices were mostly flat on
Wednesday as traders refrained from betting heavily in either
direction before they see if the Federal Reserve provides any
clues on the timing of interest rate moves.
On Tuesday, gold was pulled both ways due to the dollar's
strength and inflation fears. The stronger dollar pressured gold,
but that was countered by inflation fears ignited by an
unexpected jump in producer prices and rallying oil prices.
Shuji Sugata, a manager at Tokyo's Mitsubishi Corp Futures
Ltd, said the gold market was wary of trading heavily in either
direction ahead of the Fed meeting.
"There's a sense of caution and with the firm dollar this is
capping gold's upside today," he said.
But Sugata said gold was not falling heavily either due to
bargain hunting at lows.
The Fed is due to complete its policy meeting on Wednesday.
While no change in interest rates is expected, traders will
be scrutinising the statement the Federal Open Market Committee
(FOMC) releases at 1915 GMT for possible clues on the timing of
rate moves.
Recent economic data has shown an improvement, raising
speculation that tightening may come sooner than previously
expected, helping to lift the dollar. []
Spot gold <XAU=> was at $1,123.90 per ounce at 0612 GMT,
little changed from New York's notional close of $1,124.40. It
has recovered from a four-week low of $1,109.10 hit on Friday.
Spot gold is now trading about 8 percent below a record high
of $1,226.10 marked on Dec. 3.
U.S. gold futures for February delivery <GCG0> nudged up 0.2
percent to $1,125.20 an ounce on the COMEX division of the NYMEX.
Futures were down some $100 from their record high of
$1,227.50 hit on Dec. 3.
Sugata said that barring some unexpected development gold
prices were likely to be range-bound, hovering around current
levels for the time being.
"Given that Christmas is almost here, and the New Year break
comes after that, gold prices are unlikely to move strongly in
either direction in the short term," he said.
Fed Chairman Ben Bernanke, in a response to a lawmaker's
questions made public on Tuesday, said the U.S. economy is
operating so far beneath its potential that inflation is unlikely
to become a problem. []
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD>, said its holdings stood at 1,116.551 tonnes as
of Dec. 15, unchanged from the previous business day. []
PRICES
Precious metals prices at 0613 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1124.00 -0.40 -0.04 27.71
Spot Silver 17.34 -0.07 -0.40 53.18
Spot Platinum 1436.00 -9.50 -0.66 54.08
Spot Palladium 362.00 -1.80 -0.49 96.21
TOCOM Gold 3248.00 27.00 +0.84 26.23 56642
TOCOM Platinum 4152.00 5.00 +0.12 56.56 9950
TOCOM Silver 504.10 3.40 +0.68 57.88 352
TOCOM Palladium 1044.00 -4.00 -0.38 89.82 120
Euro/Dollar 1.4536
Dollar/Yen 89.53
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 Joseph
Radford)
