RPT-PRECIOUS-Gold dips below $990, hurt by dollar's rise vs euro

(Repeats to additional subcribers)

* Gold underpinned as buying expected at $990-$985/oz

* Dollar's rise versus euro hurts sentiment

* SPDR Gold holdings XAUEXT-NYS-TT unchanged

By Risa Maeda

TOKYO, Sept 28 (Reuters) - Gold fell below $990 an ounce on
Monday as a rise in the dollar versus the euro weighed on the
precious metal, whose inability to stay above $1,000 has
disappointed some investors.

Gold's inverse relationship with the dollar over the past few
weeks has become stronger. Gold is often considered an
alternative asset to the greenback, while a higher dollar makes
commodities expensive for holders of other currencies.

Spot gold XAU= briefly touched the day's high of $995.50 an
ounce before retreating to $987.60, down 0.3 percent from New
York's notional close of $990.95.

U.S. gold futures for December delivery GCZ9 eased 0.2
percent to $990.0 an ounce from $991.6 per ounce on the COMEX
division of the New York Mercantile Exchange. On Friday, the
contract fell $7.30.

"Unwinding of euro long positions is propping up the dollar.
A strong dollar trend is seemingly in place again, and that is
negative for gold," said Kaname Gokon, deputy general manager at
the research section of Okato Shoji Co, a commodity brokerage.

"But gold market sentiment doesn't look so bad as buying is
expected at the $990-$985 level," he said.

The euro fell 0.8 percent from late Friday in New York to
$1.4578 EUR=, dragged down by its fall against the yen and
cutting gains against the dollar made on Friday after data showed
U.S. consumer sentiment hit its highest level since January 2008.
[ID:nN25501082].

Against the yen, the dollar fell as low as 88.23 yen JPY=,
its lowest in eight months, before back clawing above 89 yen,
amid debate over whether Japanese authorities would intervene to
stem the currency's gain. [ID:nYEN] [FRX/] FXNEWS

Last week, spot gold fell 1.5 percent in its biggest weekly
loss in 11 weeks, ending five straight weeks of gains.

On Friday, gold hit a two-week low of $984.70 amid investor
frustration with the precious metal's inability to stay above
$1,020 an ounce hit on Sept. 17.

G20 leaders last week pledged to keep emergency economic
support in place until a sustainable recovery was assured, an
increasing sensitive issue for global financial markets.
[ID:nLH78576]

Yet, uncertainty over the global economy is putting a lid on
gains in equity markets. [ID:nN2710435] Lower stock markets
reduce gold's allure as an inflation hedge.

Data late last week showed a recent rally in gold prices had
been partly driven by buying by short-term investors.

The non-commercial net long position in gold futures on the
COMEX division of the New York Mercantile Exchange stood at an
all-time high of 236,749 lots for the week ended Sept. 22,
figures from the Commodity Futures Trading Commission showed.

The net long positions marked record highs for a third
straight week. [ID:nN25521561] [ID:nN25522855]
[ID:nN25495224]

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust (GLD), said its holdings stood at 1,094.107
tonnes on Friday, unchanged from the previous business day.
XAUEXT-NYS-TT [GOL/SPDR]
Precious metals prices at 0526 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 988.00 -2.95 -0.30 12.25
Spot Silver 15.79 -0.21 -1.31 39.49
Spot Platinum 1275.00 2.50 +0.20 36.80
Spot Palladium 289.00 0.50 +0.17 56.64
TOCOM Gold 2855.00 -62.00 -2.13 10.96 54690
TOCOM Platinum 3678.00 -111.00 -2.93 38.69 13965
TOCOM Silver 454.00 -19.90 -4.20 42.19 678
TOCOM Palladium 835.00 -19.00 -2.22 51.82 297
Euro/Dollar 1.4592
Dollar/Yen 89.44
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)