* Dollar slips vs basket of currencies
* Comex gold snaps 10-day losing run
* Coming up: U.S. weekly jobless claims at 1230 GMT
(Adds ABN AMRO forecasts, updates prices)
By Manolo Serapio Jr
MANILA, July 23 (Reuters) - Gold edged up from a five-year
low on Thursday as the dollar weakened, but the modest gains
suggest bearish investors are still hovering in the market after
an early-week rout led to bullion's deepest loss in nearly two
years.
Holdings in the world's biggest gold-backed exchange-traded
fund, SPDR Gold Shares GLD , shrank for a fifth day on
Wednesday to the lowest level since 2008.
Spot gold XAU= rose 0.4 percent to $1,097.54 an ounce by
0608 GMT, after sliding more than 1 percent to $1,086.89 on
Wednesday, its cheapest since March 2010.
Gold tumbled as much as 4 percent on Monday in a sell-off
exacerbated by big trading volumes on the Shanghai Gold Exchange
after investors dumped more than $500 million of bullion in New
York in seconds during early Asian trading hours.
"It is going to be foolish to be a gold bull right now. The
gold bugs would have to wait for their day, but equally I don't
think it is going to be a complete collapse from here either,"
said Vishnu Varathan, senior economist at Mizuho Bank.
Gold has been dragged down by expectations the Federal
Reserve will raise interest rates later this year as the U.S.
economy recovers. Data on Wednesday showed U.S. home resales
rose in June to their highest level in nearly 8-1/2 years.
ID:nL1N1020ZU
But Varathan said while the Fed may be tightening policy,
others such as the European Central Bank and the Bank of Japan
are still engaged in quantitative easing, which could boost
inflation and spur demand for gold as a hedge.
"Gold may be headed lower but I don't think it's set up for
an outright collapse like what we saw in iron ore over the last
two years," said Varathan.
Hit by a global glut as top market China's steel demand
wanes, the price of steelmaking iron ore has fallen to a third
of its 2013 peak.
But ABN AMRO said it expects gold "to be the worst
performing precious metal over the coming year", with a year-end
target of $1,000 and $800 for end-2016.
U.S. gold for August delivery GCcv1 was up 0.5 percent at
$1,096.70 an ounce, after a 10-session decline.
Holdings of SPDR Gold Trust dropped to 22.098 million ounces
on Wednesday, the lowest since August 2008. GOL/ETF
"Bullion may be at risk of further declines should gold-ETFs
continue to liquidate," HSBC analyst James Steel wrote.
Spot palladium XPD= was the outperformer among precious
metals, climbing 1.7 percent to $634.60 an ounce, having fallen
to its lowest since 2012 during Monday's selloff. Platinum
XPT= rose 0.5 percent to $984 an ounce and silver XAG= was
flat at $14.79.