Gold eases but $1,100 still in sight

By Miho Yoshikawa

TOKYO (Reuters) - Spot gold inched lower on Thursday but remained within striking distance of the $1,100 level after hitting an all-time high for the second straight session on a weak dollar the previous day.

News this week of India's purchase of 200 tonnes of gold from the International Monetary Fund has also provided gold with upward momentum to rise back towards $1,100.

The IMF's transaction represents about half of a long-planned bullion sale, which now has the gold industry wondering who will be buying the remainder that is due to be sold.

The dollar remains under pressure after falling on Wednesday after the U.S. Federal Reserve reiterated its commitment to keep interest rates low for an "extended period."

Akira Doi, a managing director at Tokyo's Daiichi Commodities Co Ltd, said gold could fall on profit-taking this month after it eventually hits $1,100.

"Funds close their books in November, and one should keep in mind they may decide to pocket profits and sell this month," he said.

Noncommercial net long positions in U.S. gold futures remained near a record.

He added, however, that gold was likely to remain above $1,000 even if it is hit by profit-taking, noting that India's purchase from the IMF was made near an average of $1,045 an ounce.