* ETF holdings hit lowest since early 2009
* Gold to hover above $1,385 -technicals
* Coming up: U.S. weekly jobless claims at 1230 GMT
(Adds quotes, updates prices)
By A. Ananthalakshmi
SINGAPORE, May 16 (Reuters) - Gold reversed early losses on
Thursday after the U.S. dollar weakened, but remained under
pressure as holdings in exchange-traded funds tumbled to their
lowest in four years.
Rallying stocks also hurt bullion's appeal as an alternative
investment, although tight physical supply in the world's
largest consumer India could offer some support.
Gold was up 0.24 percent at $1,395.61 by 0312 GMT,
having slipped to a near 1-month low at $1,386.89 in volatile
trade. Prices have fallen more than 16 percent this year and are
well below a record high of around $1,920 struck in September
2011.
"The recent stronger profile of the U.S. dollar has
undermined some of the financial investments side of buying
gold," said Tim Riddell, head of ANZ Global Markets Research,
Asia. A stronger greenback makes dollar-denominated commodities
more expensive for holders of other currencies.
Bullion fell for a fifth straight session on Wednesday in
its longest daily losing streak since January 2011 as the S&P
500 hit a new all-time high.
U.S. gold for June delivery stood at $1,394.20, down
2.00.
A drop in ETF holdings indicates that investors are shifting
to equities from gold. Holdings in SPDR Gold Trust, the
world's largest gold-backed ETF, fell 0.43 percent to 1047.14
tonnes on Wednesday, their lowest since March 2009.
Financial markets are buzzing with speculation that the U.S.
Federal Reserve will begin winding down its asset-purchasing
programme, which is tantamount to printing money.
Bullion hit an 11-month high in October last year after the
Fed announced its third round of aggressive economic stimulus,
raising fears the central bank's money-printing to buy assets
would stoke inflation.
"Markets will continue to move lower," said Peter Fung, head
of dealing at Wing Fung Precious Metals in Hong Kong, adding
that gold prices could slip to around $1,380 an ounce.
Gold sales in India could increase due to the lower prices,
but recent import curbs by the central bank could keep buying in
check, Fung said.
Premiums for physical gold in India have jumped sharply
this week due to limited supply after the central bank
restricted imports to rein in a record current account deficit.
In other parts of Asia, dealers noted strong demand from
No.2 consumer China as high domestic prices prompted
consumers to buy gold bars from Hong Kong.
Precious metals prices 0312 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1395.61 3.32 +0.24 -16.66
Spot Silver 22.70 0.13 +0.58 -25.03
Spot Platinum 1484.49 -1.51 -0.10 -3.29
Spot Palladium 724.97 0.47 +0.06 4.76
COMEX GOLD JUN3 1394.20 -2.00 -0.14 -16.80 18543
COMEX SILVER JUL3 22.69 0.03 +0.12 -24.96 4422
Euro/Dollar 1.2873
Dollar/Yen 102.19
COMEX gold and silver contracts show the most active months
(Editing by Lewa Pardomuan and Joseph Radford)
