PRECIOUS-Gold inches up as dollar steady, ETF eases

* Physical buying seen around $940 to give support

* Eyes on Fed comments on U.S. economy, recovery prospects

* SPDR Gold holdings XAUEXT-NYS-TT fall 0.35 tonnes

By Chikako Mogi

TOKYO, Aug 11 (Reuters) - Gold prices inched up on Tuesday
but stayed near a 10-day low hit the previous day when the
dollar's rise hurt sentiment, with investors awaiting the outcome
of the Federal Reserve's meeting ending on Wednesday.

Market reaction was muted to a slew of Chinese data including
industrial output, which was a tad below forecast, and trade,
which was slightly better, as traders focused on what the Fed may
say about the U.S. economy and recovery prospects.
[ID:nBJB000643] [ID:nBJB000645]

Prices remained in a narrow range but traders said the level
at which physical demand emerges appears to have risen slightly,
with buying interest seen around $940 to offer support.
"The markets are going to focus on the Fed's interest rate
meeting ... looking for what the Fed has to say about the
stabilisation of the U.S. economy and what they will be doing
should the economy recover," said Adrian Koh, an analyst at
Phillip Futures in Singapore.

"Other factors to note will be how they plan their exit
strategy," he said.

While gold was looking softer it was likely to find support
around $940 and remain on a "sideward consolidation pattern
around $920-$980", Koh said.

Spot gold XAU= inched up 0.2 percent to $946.25 an ounce as
of 0556 GMT, compared to New York's notional close of $944.65 per
ounce.

U.S. gold futures for December delivery GCZ9 rose 0.2
percent to $948.60 per ounce, compared with $946.90 an ounce on
the COMEX division of the New York Mercantile Exchange.

Gold futures dropped to a 10-day low under $950 an ounce on
Monday, losing more than 1 percent on technical selling and a
resurgent dollar amid positive economic news.

The Fed is expected to hold interest rates steady at its
two-day policy meeting, with some analysts saying it may try to
discourage speculation of a near-term rate rise after the
payrolls data boosted expectations of possible monetary
tightening. [ID:nN07416548]

The dollar held steady on Tuesday after rising against a
basket of currencies for a third day the previous day when
investors continued to trade on stronger-than-expected U.S. jobs
numbers. [USD/]

Last week the precious metal retreated from a two-month high
above $970 when the dollar rallied on renewed hopes for an
improvement in the economy.

As the market slipped, funds left the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust (GLD), with
its holdings falling for the second straight day to 1,068.55
tonnes as of Aug. 10, down 0.35 tonnes or 0.03 percent from the
previous business day.

Its holdings are now down nearly 6 percent from a record
1,134.03 tonnes on June 1. [GOL/SPDR]

PRICES
Precious metals prices at 0553 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 946.10 1.45 +0.15 7.49
Spot Silver 14.42 0.12 +0.84 27.39
Spot Platinum 1247.50 4.00 +0.32 33.85
Spot Palladium 273.00 1.00 +0.37 47.97
TOCOM Gold 2955.00 -38.00 -1.27 14.85 25756
TOCOM Platinum 3886.00 -23.00 -0.59 46.53 9316
TOCOM Silver 448.00 -8.90 -1.95 40.31 212
TOCOM Palladium 860.00 -6.00 -0.69 56.36 412
Euro/Dollar 1.4141
Dollar/Yen 96.79
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 Miho Yoshikawa)