PRECIOUS-Gold firms on dollar retreat, ETF unchanged

* Bullion helped by oil price rises, but gains limited

* SPDR gold ETF holdings XAUEXT-NYS-TT unchanged

By Chikako Mogi

TOKYO, June 11 (Reuters) - Gold prices firmed on Thursday as
a retreat in the dollar encouraged buying to hedge against the
value of dollar-denominated assets, but gains were limited.

Gold also benefited as oil prices rallied on optimism about
the economy, fanning fears about future inflation.

But with stocks and currency markets generally confined to
narrow ranges, gold has been struggling to test the key $1,000
level last hit in February, facing physical demand selling and
profit-taking on rises in the market.

"Gold lacks a decisive factor to motivate it to break out of
a recent range, while some money may be shifted from gold to the
oil market, which is clearly rising," said Shuji Sugata, a
manager at Mitsubishi Corp Futures & Securities in Tokyo.

Spot gold XAU= rose 0.4 percent to $957.70 as of 0615 GMT
from New York's notional close of $953.65 per ounce, but well off
Thursday's high of $965.25.

U.S. gold futures for August delivery GCQ9 were also up 0.4
percent at $958.80 per ounce, compared with $954.70 an ounce on
the COMEX division of the New York Mercantile Exchange.

Traders said gold will likely be supported near $940, a
recent low when prices fell from a high near $990 hit last week,
but stay below $965, where the rebound from the recent low was
capped.

The dollar fell against a basket of currencies on Thursday,
paring some gains made after the benchmark U.S. Treasury yield
hit its highest point in eight months the previous day. [USD/]

Currency trade overall was subdued in Asia as investors
waited to see if an auction of 30-year Treasury bonds later in
the day would add to rising U.S. long-term yields after the
results of Wednesday's sales of 10-year Treasury notes heightened
concerns over the ballooning U.S. budget deficit, dealers said.

The oil market remained bullish on prospects for the economy,
and oil prices, helped also by falling inventories, surged to a
near eignt-month high above $72 a barrel CLc1.

"Investors seem to see the rise in interest rates positively
now as a sign of economic recovery, compared to earlier this
month when they saw it negatively as a reflection of inflationary
pressures resulting from massive bond issuances to help the
economy," Sugata said.

While investors switch back and forth between their
interpretations of developments in financial markets, many are
still wary of the risk of upcoming data undermining the current
optimism and turning sentiment around, traders said.

"That feeling of uncertainty is providing underlying support
to gold, as seen in steady holdings of gold ETFs," Sugata said.

The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust (GLD), said its holdings were steady at 1,132.15
tonnes as of June 10, unchanged from the previous business day.
Precious metals prices at 0625 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 957.00 3.35 +0.35 14.93
Spot Silver 15.25 0.10 +0.66 3.25
Spot Platinum 1263.50 2.50 +0.20 -16.88
Spot Palladium 255.00 2.00 +0.79 -30.71
TOCOM Gold 3025.00 -1.00 -0.03 -1.14 29063
TOCOM Platinum 3992.00 33.00 +0.83 -25.23 15702
TOCOM Silver 479.50 1.40 +0.29 -11.37 247
TOCOM Palladium 816.00 6.00 +0.74 -39.60 341
Euro/Dollar 1.4049
Dollar/Yen 97.89
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda; Editing by Joseph Radford)