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Gold Steady Above $1, 060 on Dollar,

TOKYO (Reuters) 16/10/09. Gold was steady above $1,060 per ounce on
Thursday as the dollar's weakness and oil's strength maintained the
precious metal's appeal.

Gold rose to new peaks above $1,070 per ounce on Wednesday as the
greenback continued to slide against a basket of six currencies, although
there were worries that the metal may have become overbought.

"There doesn't seem to be any particular reason at this present juncture to
be selling gold given that the dollar is continuing to weaken," said Darren
Heathcote, head of trading at Investec Australia.

On Thursday, the dollar fell to its lowest in 14 months against the euro and
against a basket of six currencies.

Gold was at $1,063.90 per ounce at 0239 GMT, up 0.2 percent.

U.S. gold futures for December delivery were at $1,065.50 per ounce, up
0.1 percent.

The strength of crude oil prices has been adding to gold's rise given the
precious metal's traditional role as a hedge against inflation.

Oil rose above $75 a barrel to settle at a record high for the year on
Wednesday as economic optimism hinted at a recovery in global energy

Gold's rush to unchartered waters has not been without worries, however.

"There's been a huge build-up of longs over the last month or so, so one
has to see that its susceptible ... to some profit taking, but who wants to be
the first person to step in and do it?" asked Heathcote.

Moreover, bullion's rise has not been accompanied by physical buying as
high prices have deterred many traditional consumers.

Gold demand remained elusive in India, a key buyer, even as the biggest
gold buying festival, Dhanteras, neared, dealers said.

The festival season, when jewellery is bought as gifts, ends in October.

"We are heading towards the season of physical buying, there will be
some, but how limited that will be at the end of the day is yet to be seen
given these very inflated prices," Heathcote said.

The world's largest gold-backed exchange-traded fund, the SPDR Gold
Trust, said its holdings stood at 1,109.314 tonnes as of October 14,
unchanged from the previous business day.

The generally bullish sentiment on gold has rubbed off on other precious

Spot silver was at $17.88, up a touch from $17.85. It recently hit a 15-month
high of $18.07.

The world's primary silver producer Fresnillo <FRES.L> said it sees silver
near $17-$18 an ounce for the rest of 2009.

Platinum was at $1,358.50 compared to $1,358, while its sister metal
palladium was flat at $326.50.

Platinum recently hit a 13-month high of $1,362.50 and palladium a
14-month peak of $333.