PRECIOUS-Gold dips, hovers below $940/oz; ETF unchanged

* Range-bound as currencies confined to narrow ranges

* SPDR gold ETF holdings XAUEXT-NYS-TT unchanged

By Risa Maeda

TOKYO, June 18 (Reuters) - Gold eased a touch on Thursday,
giving up earlier gains to hover slightly below $940 as a halt in
the dollar's slide dulled some of bullion's allure as an
alternative investment.

But the dollar barely moved from late U.S. levels, providing
little direction for gold, which moved within a tight band.
[USD/]

Investors were reluctant to trade currencies actively before
hearing the Federal Reserve's stance on rate moves and bond
buying at its two-day meeting next week after a spike in
long-term yields this month.

On Wednesday, gold rose as the dollar fell versus most other
major currencies after an unexpectedly small rise in U.S.
inflation and a debt rating downgrade of U.S. banks by Standard &
Poor's. [ID:nN17353623]

Gold often trades with an inverse correlation to the dollar
as some investors use the metal as a dollar hedge.

Spot gold XAU= was down 0.1 percent at $937.70 per ounce at
0535 GMT from New York's notional close of $938.40. The low so
far is $937.20.

It earlier rose as high as $942.70, a level last seen on June
12 and up almost 2 percent from this week's trough of $925.50.

The dollar's recent strength has hurt gold's attraction as a
hedge against it, sending bullion prices falling from a
three-month high around $990 an ounce reached two weeks ago.

"People have got used to following the currency markets. Now
that the currency markets are caught in narrow ranges, so is the
gold market," said Yuichi Ikemizu, Tokyo branch manager at
Standard Bank Plc.

U.S. gold futures for August delivery GCQ9 were at $938.70
per ounce, up 0.3 from Wednesday's settlement of $936 on the
COMEX division of the New York Mercantile Exchange.

But gold was seen as firmly underpinned after a fall below
$930 earlier this week that was short-lived due to physical
buying by retail investors mainly from Southeast Asia.

"The downside risk seems to be receding after a fall below
$930 encouraged the restart of physical buying. But I don't think
gold is buoyant enough to challenge a level above $950 for now,"
Ikemizu said.

In Tokyo, scattered investor buying of gold bars emerged
earlier this week but it was not enough to totally offset
physical selling to lock in profits, traders said.

Demand from investors seeking alternatives to conventional
assets stayed weak. The world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust (GLD), said its
holdings stood at 1,132.15 tonnes on June 17, unchanged since
June 5. [GOL/SPDR]
Precious metals prices at 0538 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 937.80 -0.60 -0.06 6.55
Spot Silver 14.31 -0.01 -0.07 26.41
Spot Platinum 1205.00 4.00 +0.33 29.29
Spot Palladium 241.50 1.00 +0.42 30.89
TOCOM Gold 2900.00 -24.00 -0.82 12.71 32618
TOCOM Platinum 3736.00 -71.00 -1.86 40.87 13620
TOCOM Silver 437.10 -5.20 -1.18 36.89 243
TOCOM Palladium 753.00 -14.00 -1.83 36.91 219
Euro/Dollar 1.3933
Dollar/Yen 95.77
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Reporting by Risa Maeda, Miho Yoshikawa)