* Gold recovers poise as the dollar weakens
* Catches lift from oil's rise toward $72 <CLc1>
* Physical demand weak, scrap supply emerging, traders say
* ETF Securities palladium ETC holdings rise to record
(Updates prices, adds comment)
By Jan Harvey
LONDON, Sept 10 (Reuters) - Gold gained traction above $990
per ounce on Thursday as the dollar index weakened after U.S.
weekly jobs data, while rising oil prices also gave the metal a
lift as a potential inflation hedge.
Bullion still faced a struggle to regain the $1,000
psychological level, however, with some traders expressing
disappointment at the market's inability to sustain this week's
stunning run to 18-month highs at $1,007.45.
Spot gold <XAU=> was bid at $992.40 an ounce at 1541 GMT
compared with $991.15 late in New York on Wednesday, having
touched a low of $982.10 in earlier trade.
Oil rose toward $72, supported by a report from the
International Energy Agency (IEA) that global demand would be
higher than forecast [].
"The resumption of dollar weakness has been supportive. The
oil market has also gotten a little succour from the IEA report,
and oil helped to stiffen gold," HSBC metals analyst James Steel
said.
Gold has found favour as a hedge against the potential for
oil-induced inflation, and Steel said while that argument was
keeping prices firm, the reality of price rises may not
materialise.
"Those that are buying gold on an inflationary argument may
be disappointed, but that could take time to unfold," he added.
Gold rallied above $1,000 an ounce for only the third time
in history on Tuesday after breaking a number of key technical
resistance levels. News Barrick Gold <ABX.TO> was cutting its
hedgebook of forward gold sales fuelled gains. []
The market has also relied heavily on dollar weakness for
support. The dollar index <.DXY> declined on Thursday after data
showed the number of workers filing new claims for jobless
benefits fell last week. []
A weak U.S. currency boosts interest in gold as an
alternative asset, and also makes the dollar-priced precious
metal cheaper for non-U.S. investors.
STRUGGLE TO $1,000
Traders say they are waiting to see whether the gains that
took gold above $1,000 an ounce can be sustained. If the metal
seems vulnerable at higher levels, selling is likely to gain
momentum.
Heraeus' head of sales Wolfgang Wrzesniok-Rossbach said gold
had struggled to establish itself at higher levels.
"We have had bad news on physical demand from India and
Turkey, we are seeing a lot of scrap coming in, for example from
Hong Kong ... (and) industrial demand is low, so from a
fundamental point of view there is no reason for gold to trade
above $1,000," he added.
U.S. gold futures for December delivery <GCZ9> on the COMEX
division of the New York Mercantile Exchange fell $3.10 to
$993.80 an ounce.
Among other precious metals, silver <XAG=> rose to $16.43
from $16.27, platinum <XPT=> was at $1,277.00 against $1,276.00,
while palladium <XPD=> eased to $288.50 from $290.50.
ETF Securities said holdings of its London palladium-backed
exchange-traded fund <PHPD.L> rose 5.5 percent to a record
477,766 ounces, while its gold and silver-backed products also
recorded inflows. []
(Additional reporting by Veronica Brown; Editing by Sue Thomas)
