PRECIOUS-Gold extends losses, sinks towards $940

* Gold retains inverse relationship to dollar

* SPDR Gold holdings XAUEXT-NYS-TT steady

By Miho Yoshikawa

TOKYO, Aug 17 (Reuters) - Gold slipped towards $940 on Monday
to extend losses from late last week when lacklustre U.S.
consumer confidence data clouded the economic outlook, causing
oil to fall and dulling the metal's appeal as an inflation hedge.

The precious metal is now nearing the month's trough of
$939.40 marked last week, while its fate remains closely tied to
an inverse correlation with the dollar.

"Gold's decline on Friday was seen as pretty negative and the
market's just on a bit of a follow-through this morning," said
Adrian Koh, an analyst at Phillip Futures in Singapore.

Bullion ended lower on Friday as the weak U.S. consumer
sentiment data cast doubts on a quick economic recovery, pushing
oil prices lower and causing inflation worries to ease.

Gold XAU= was at $943.30 an ounce at 0540 GMT on Monday,
down 0.3 percent from New York's notional close of $945.85.

It erased earlier gains that had lifted it as high as
$947.85.

U.S. gold futures for December delivery GCZ9 were down 0.4
percent at $945.2 an ounce.

"As per usual, the dollar seems like it's starting to
strengthen again and gold's certainly taken a step back on that,"
Koh said.

"Near-term support for gold should come in around the $940s,
and a break below those levels should see gold heading towards
the $920-$930 regions," he said.

That level was last seen in late July, when gold prices
dipped to a low of $925.10 on July 29.

U.S. crude oil futures CLc1 slipped below $67 a barrel on
Monday, extending the previous session's 4.3 percent decline as
profit-taking continued following the release of the poor U.S.
economic data. [O/R]

The euro EUR= slipped 0.4 percent to $1.4142. [USD/]

Japan's Nikkei average share average fell 3 percent. [.T]

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust (GLD), said its holdings stood at 1,065.49 tonnes
as of Aug. 14, unchanged since Aug. 11. [GOL/SPDR]

Noncommercial net long U.S. gold futures positions fell 1.8
percent to 190,086 lots in the week to Aug. 11 from 193,514 lots,
a weekly report by the U.S. Commodity Futures Trading Commission
showed. [ID:nN14618208]

In industry news, gold miner Newcrest Mining Ltd (NCM.AX)
reported an 85 percent rise in annual net profit to A$248 million
($206 million) on Monday thanks to higher gold prices, but still
below forecasts, while signalling higher production this year.
[ID:nSYB006053]

PRICES

Precious metals prices at 0542 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 943.60 -2.25 -0.24 7.21
Spot Silver 14.48 -0.20 -1.36 27.92
Spot Platinum 1243.50 -11.00 -0.88 33.42
Spot Palladium 271.50 -2.00 -0.73 47.15
TOCOM Gold 2878.00 -66.00 -2.24 11.85 38171
TOCOM Platinum 3788.00 -115.00 -2.95 42.84 10261
TOCOM Silver 439.60 -22.40 -4.85 37.68 212
TOCOM Palladium 831.00 -21.00 -2.46 51.09 229
Euro/Dollar 1.4145
Dollar/Yen 94.52
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 Chikako Mogi; Editing by Chris
Gallagher)