- Gold sees support near $1,070, resistance around $1,170
- SPDR gold holdings steady
TOKYO, Dec 14 (Reuters) - Gold prices rose and moved away from four-week lows on Monday as the dollar reversed course and dipped against a basket of major currencies, paring gains made after upbeat U.S. economic data late last week.
Volume remained light with Christmas and year-end holidays approaching, and the market was seen likely to face more liquidations from investors looking to close or lighten positions.
The Federal Reserve will hold a policy-setting meeting on Tuesday and Wednesday and is expected to repeat a pledge to keep interest rates extraordinarily low for an extended period even as it acknowledges signs of economic healing. [ID:nN13200680]
Expectations for U.S. interest rates to remain low for a long period were one key factor weighing on the dollar and supporting gold, as excess money found its way into the yellow metal as a means to protect against a devaluing currency.
But traders and analysts said after gold reached near $1,300 per ounce earlier this month, up nearly 40 percent from the start of the year, that investors had become wary of the market's rapid pace of rises and elevated price levels.
Gold is up in a thin market today but market direction is still unclear, with more bias to the downside under current conditions than the upside, said Hiroyuki Kikukawa, general manager in the market research department at Nihon Unicom.
As gold had raced up ahead of other commodities, it is also likely the first to undergo a correction. The market has not rebounded strongly and funds' long positions have not been liquidated fully. Gold is expected to face corrective pre-Christmas selling this week, Kikukawa said.
He said spot gold was likely to be supported around $1,070 and capped near $1,170 in the near term.
Spot gold XAU= inched up 0.6 percent to $1,120.05 per ounce as of 0150 GMT, compared to New York's notional close of $1,113.85.
Spot gold is now trading more than $100 below its record high $1,226.10 reached on Dec. 3, and up about 27 percent from the start of the year.
Spot bullion hit a four-week low of $1,109.10 on Friday as better-than-expected U.S. retail sales data boosted hopes for a self-sustaining economic recovery and bolstered the dollar, sending gold investors racing to cut positions. [ID:nN11254372]
U.S. gold futures for February delivery GCG0 inched up 0.2 percent to $1,121.60, compared to $1,119.90 an ounce on the COMEX division of NYMEX. Futures were also off more than $100 from the record high of $1,227.50 hit on Dec. 3.
Noncommercial net long U.S. gold futures positions fell to 254,429 lots in the week to Dec. 8 from 259,064 lots, a weekly report by the U.S. Commodity Futures Trading Commission showed. [ID:nN11147207]
As an indication of a slowdown in gold investment, holdings at the world's largest gold-backed exchange-traded fund, SPDR Gold Trust (GLD), reamined steady at 1,116.247 tonnes as of Dec. 11. [GOL/SPDR]
The dollar pared earlier gains on Monday after it rose to a six-week high against a basket of major currencies and a two-month high against the euro on Friday. [USD/]
Precious metals prices at 0151 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1120.10 6.25 +0.56 27.26
Spot Silver 17.23 0.12 +0.70 52.21
Spot Platinum 1420.50 -5.50 -0.39 52.41
Spot Palladium 360.00 2.50 +0.70 95.12
TOCOM Gold 3207.00 -57.00 -1.75 24.64 53876
TOCOM Platinum 4067.00 -20.00 -0.49 53.36 7009
TOCOM Silver 496.70 -4.80 -0.96 55.56 110
TOCOM Palladium 1037.00 -4.00 -0.38 88.55 141
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Watson)
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