RTRS: Gold hovers at $1,030/oz, ETF holdings dip for 3rd day
By Risa Maeda
TOKYO (Reuters) - Gold prices steadied around $1,030 per ounce on Thursday, pausing their decline for now after earlier hitting a new three-week low of $1,025.75, but the topside was capped by a recovery in the U.S. dollar.
An extended fall in higher-yielding currencies as well as in stocks, partly reflecting fears over the pace of economic recovery, suggested investors kept unwinding growth-linked trades that had been in vogue in recent months.
"A run-up in gold after the Labour Day holiday (on September 7) has been way overdone," said Kaname Gokon, deputy general manager in the research section of Japanese commodity broker Okato Shoji Co.
"That needs to be corrected until a floor is found at $990-$1,000," Gokon said, referring to the level bullion stood at in the second week of September.
That floor could be touched before U.S. monthly job report data due early next month, he added.
The precious metal had been taking buying cues from fast-growing optimism over economic recovery, which fueled inflation concerns. A steadily declining dollar also increased the allure of the precious metal as an alternative asset.
Spot gold edged up to $1,031.60 by 0240 GMT, up 0.5 percent from New York's notional close of $1,026.85.
Technically the $1,025-$1,030 level has been considered as a short-term floor as it provided a long-standing ceiling that gold passed through earlier this month.
Bullion was down more than 3 percent from a record high above $1,070 hit on October 14.
U.S. gold futures for December delivery traded at
$1,032.10 per ounce after falling $4.90, or 0.5 percent, to $1,030.50 on Wednesday.
In the foreign exchange market, the U.S. dollar held firm near its highest in more than two weeks against a basket of currencies .DXY, pulling further away from a 14-month low marked on October 21.
Investor appetite for bullion stayed low, with the world's largest gold-backed exchange-traded fund reporting a third consecutive daily outflow.
SPDR Gold Trust said its holdings stood at 1,104.434 tonnes as of Oct 28, down 1.22 tonnes or 0.1 percent from the previous business day and bringing the total decline this week to 3.66 tonnes.
Among other precious metals, spot silver rose to $16.21 per ounce, off a new three-week low of $16.08 marked earlier on Thursday. Platinum clawed above $1,300 to $1,308.50 per ounce after touching a new three-week low of $1,297.00 on Wednesday.
