Gold steadies above $1,040/oz, ETF holdings dip

By Risa Maeda

TOKYO (Reuters) - Gold prices were steady above $1,040 an ounce on Monday after falling the previous business day, underpinned by a recovery in the euro versus the dollar.

Bullion fell about 1 percent last week, marking its first weekly loss since the week of September 25, following four consecutive weeks of gains.

Spot gold was almost flat at $1,043.60 an ounce at 0309 GMT, compared with New York's notional close of $1,044.40.

It hit a three-week low of $1,025.75 last week, down more than $40 from a record above $1,070 marked on October 14, but has since showed resilience when compared with sharp falls in prices of other commodities, traders said.

"Investor risk aversion on Friday caused a sell-off in equities as well as the euro, resulting in a rise in the dollar. The firming dollar put pressure on gold," said Koichiro Kamei, managing director at financial research firm Market Strategy Institute in Tokyo.

"But gold's very role as a alternative to currencies is supporting its prices on dips," he said.

There are views that the dollar will remain bearish in the midterm as no immediate change is likely in U.S. monetary policy given concerns over the financial system, highlighted by news that CIT Group filed for bankruptcy, Kamei said.

Buybacks by mining companies to reduce short positions for hedging were also behind gold's resilience, he said.