* Gold barely budges after modest gains as dollar recovers
* Asia stocks at 11-wk high on upbeat US housing, goods
data
* Investors ponder how long stock market rally will last
* SPDR holdings stay at record high
(Updates prices, adds quotes)
By Chikako Mogi
TOKYO, March 26 (Reuters) - Gold prices were little changed
on Thursday as the dollar recovered, with investors keeping
their eyes peeled for signs of risk appetite as Asian shares
hit their highest level in 11 weeks.
Gold got a boost on Wednesday after U.S. Treasury Secretary
Timothy Geithner suggested he was open to expanding the use of
an IMF currency basket, stoking doubts over the dollar as the
world's reserve currency.
The dollar recovered against the yen on Thursday, after
Geithner's comments had pushed the U.S. dollar lower against
the Japanese currency and the euro the day before. Geithner
later said the dollar would keep its status as the top reserve
currency for a long time. []
Gold <XAU=> was at $934.80 per ounce at 0630 GMT, up 0.2
percent from New York's notional close of $933.15 on Wednesday.
Bullion has recovered nearly 6 percent from a six-week low
of $882.90 hit on March 18, but is still 7 percent off the
11-month high above $1,000 set in February, and well under an
all-time peak of $1,030.80 hit in March 2008.
"I do have to note the developments in the dollar will also
play a crucial role in gold's direction as recent talk has been
on quantitative easing, the dollar as a reserve currency, etc,"
said Adrian Koh, an analyst at Phillip Futures.
"The longer-term effects of quantitative easing and a
dispersion of the dollar as a reserve currency will probably be
negative for the dollar, and if the normal correlation of a
negative correlation between gold and the dollar holds, then
gold should be supported in the long term," he said.
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.
The stock rally has dampened demand for gold over the past
couple of sessions, as investors saw risk appetite starting to
kick in again. But traders and analysts remain sceptical of
whether a big rally would be sustainable.
"The question is how long this stock market rally will go.
And since many people still think that everything is not fine
yet ... Any turn back towards bad news and data will bring the
safe-haven plays back," Koh said.
Asian stocks rose to their highest in 11 weeks on Thursday,
bolstered by strong U.S. new home sales and durable goods data
out on Wednesday. []
The U.S. government reported that new home sales
unexpectedly rose at their fastest pace in 10 months in
February, while U.S. orders for long-lasting manufactured goods
also unexpectedly rebounded in the same month. [].
"There is some sense the worst may be over, with the U.S.
government doing its utmost, and the market is focusing on
negative surprises which could potentially come from elsewhere,
possibly from Europe," said a senior trader at a Japanese
trading firm.
"General uncertainties keep support firm, but the market
lacks momentum to test the upside because players are clueless
about what they should turn to for cues," the trader added.
Traders said the market looked set to stay in the $900-$950
range.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings remained at 1,124.99
tonnes on March 25, unchanged from the record hit the previous
day. []
For details on the gold holdings of the ETF listed in New
York and co-listed on other exchanges, click on:
http://www.exchangetradedgold.com/iframes/usa.php
For a graphic, click on:
https://customers.reuters.com/d/graphics/MKTS_SPDRGLD240309.jpg
Prices as of 0640 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 935.05 1.90 +0.20 6.24
Spot Silver 13.49 0.04 +0.30 19.17
Spot Platinum 1137.50 17.50 +1.56 22.05
Spot Palladium 213.50 5.00 +2.40 15.72
TOCOM Gold 2953.00 32.00 +1.10 14.77
21792
TOCOM Platinum 3609.00 67.00 +1.89 36.09
11907
TOCOM Silver 422.00 7.00 +1.69 32.16
216
TOCOM Palladium 685.00 29.00 +4.42 24.55
383
Euro/Dollar 1.3568
Dollar/Yen 97.79
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)
