PRECIOUS-Gold rises on dollar, strong oil; ETF flat

* Gold upside capped as more data needed on econ direction

* SPDR gold ETF holdings XAUEXT-NYS-TT unchanged

By Chikako Mogi

TOKYO, June 10 (Reuters) - Gold rose on Wednesday, supported
by its appeal as a hedge against dollar weakness and by soaring
oil prices, which fanned worries about future inflation.

The dollar fell broadly the day before, ending a two-day
winning streak, as investors questioned whether the economy had
improved enough to justify talk of higher U.S. interest rates by
year end.

The greenback remained under pressure on Wednesday as traders
awaited the release of the Fed's Beige Book on regional economic
conditions and an auction of 10-year U.S. Treasury notes later in
the day. The auction will be a key gauge of investor appetite for
U.S. debt.

"The gold market is holding up, with the dollar playing an
important role," said Ronald Leung, a director at Lee Cheong Gold
Dealers in Hong Kong, adding that the appreciation of Asian
currencies against the dollar has also bolstered demand for
bullion.

Gold is often bought as a hedge against dollar weakness as
dollar-priced commodities become cheaper for holders of other
currencies when the U.S. currency loses value.
Darren Heathcote, head of trading at Investec Australia, said
strong crude oil prices were also boosting bullion.

Crude oil topped $71 on Wednesday to hit a new seven-month
high.

Gold can be bought as a hedge against inflation, which erodes
the value of paper assets.

"Investors are obviously happy to return, as confidence grows
in gold as a potentially lucrative investment," Heathcote said.

Spot gold XAU= rose to $960.45 per ounce as of 0629 GMT,
0.7 percent higher than New York's notional close of $953.75.

U.S. gold futures for August delivery GCQ9 rose 0.6 percent
to $960.7 per ounce from $954.70 on the COMEX division of the New
York Mercantile Exchange.

Gold futures rebounded on Tuesday on the weaker dollar and
the rally in crude oil.

Traders said that for now gold will likely be supported near
$940, a recent low when prices fell from a high near $990 hit
last week, but hover below $965, where the rebound from the
recent low was capped.

"We need more data to see if the economy is really turning
around or whether that is just being used as an excuse for
trading. People are also looking to see where they can invest --
stocks or bonds, which are offering good yields," Leung said.

Holdings at the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust (GLD), were unchanged at 1,132.15
tonnes as of June 9. [GOL/SPDR]

PRICES

Precious metals prices at 0618 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 959.50 5.75 +0.60 9.02
Spot Silver 15.27 0.06 +0.39 34.89
Spot Platinum 1252.00 5.00 +0.40 34.33
Spot Palladium 254.00 1.50 +0.59 37.67
TOCOM Gold 3025.00 9.00 +0.30 17.57 28949
TOCOM Platinum 3954.00 43.00 +1.10 49.10 13457
TOCOM Silver 477.50 6.80 +1.44 49.55 501
TOCOM Palladium 810.00 18.00 +2.27 47.27 576
Euro/Dollar 1.4097
Dollar/Yen 97.60
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 Miho Yoshikawa)