PRECIOUS-Gold edges up in technical rebound, ETF unchanged

* Gold rises 1 pct in technical rebound from 2-½ month
low

* Market may test downside again as short-covering limited

* Asian buyers, ETF investors likely to support prices
(Updates prices. adds quote)

By Chikako Mogi

TOKYO, April 7 (Reuters) - Gold prices rose on Tuesday in a
technical rebound and a round of short-covering after dropping
6 percent over three days.

A recent rally in stocks has revived investor risk appetite
and driven money out of safe-haven gold, while a drop below key
technical levels around $880 and $870 per ounce pushed bullion
down to a 10-week low of $864.30 on Monday.

On Tuesday, gold XAU= climbed 1 percent to as high as
$877.60 per ounce, and was at $876.35 by 0530 GMT, up nearly
0.9 percent from New York's notional close of $868.80.

Bullion fell on Monday as some investors unwound safe-haven
positions while others sold as the dollar strengthened. Some
investors were also unloading gold along with other commodities
including oil and base metals.

"We have three straight days of losses, and gold should get
a bit of a bounce, and I guess we are looking at it now," said
Adrian Koh, an analyst at Phillip Futures, adding that $860
should provide near-term support.

Gold prices are still down about 13 percent from an
11-month high above $1,000 hit in February.

Falling bullion prices prompted India to buy some gold,
raising hopes the world's largest consumer could be looking for
more during the wedding season, dealers said. [ID:nSP503723]

Though some traders said gold may have been oversold, the
metal remains vulnerable to any signs of investors shifting
money into other assets.

"We are seeing short-covering today, but we might test $850
as equities are starting to become more attractive, and there
is some shift of risk appetite," said a Sydney-based trader.

Japan's Nikkei stock average .N225 inched down 0.3
percent on Tuesday as the yen crawled back against the dollar,
erasing earlier gains. U.S. stocks broke a four-day rising
streak on Monday. [.T] [.N]

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust (GLD), said its holdings stood at 1,127.37
tonnes as of April 6, unchanged from April 3 and just below a
record 1,127.44 tonnes.

Exchange-traded funds (ETFs), which back up the securities
they issue with physical commodities, are a major element of
demand.

For details on gold holdings at the ETF listed in New York
and co-listed on other exchanges, click on:

here

"With ETFs holding steady and Asian demand from India and
China emerging when prices dip, the market looks to be seeing a
temporary downward bias and traders eyeing where the floor is,
rather than chasing prices lower," said Shuji Sugata, a manager
in Mitsubishi Corp Futures and Securities' research team.

Revised euro zone fourth-quarter gross domestic product and
U.S. consumer credit data for February will be released later
in the day, offering investors clues on the state of the global
economy.
Precious metals prices at 0535 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 876.15 7.35 +0.85 -0.45
Spot Silver 12.24 0.14 +1.16 8.13
Spot Platinum 1154.00 13.50 +1.18 23.82
Spot Palladium 222.00 1.00 +0.45 20.33
TOCOM Gold 2844.00 -36.00 -1.25 10.53
31385
TOCOM Platinum 3762.00 7.00 +0.19 41.86
15296
TOCOM Silver 393.70 -11.70 -2.89 23.30
349
TOCOM Palladium 735.00 10.00 +1.38 33.64
362
Euro/Dollar 1.3352
Dollar/Yen 100.46
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; Editing by Ben Tan)