* Equities, commodities pare gains after U.S. data
* Dollar index lifts from lows
* India's gold imports fall 68 percent year-on-year in July
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By Jan Harvey
LONDON, Aug 18 (Reuters) - Gold pared gains in Europe on
Tuesday as the dollar lifted from lows against a basket of
currencies following U.S. housing and producer price data, and
as oil prices turned lower.
European equities and U.S. stock futures, boosted in earlier
trade by solid German economic sentiment data, retreated after
the U.S. numbers, denting appetite for nominally higher-risk
assets like commodities and pressuring silver, platinum and
palladium.
Spot gold <XAU=> was bid at $934.50 an ounce at 1311 GMT,
against $932.80 an ounce late in New York on Monday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange rose 70 cents to $936.50.
Gold rose in early trade as the dollar weakened, but slipped
as the U.S. currency rebounded. "Precious metals are basically
tracking the dollar," said Citigroup analyst David Thurtell.
"That sold off initially, but is coming back now."
The dollar index <.DXY> lifted from lows after data showed a
surprise slide in U.S. housing starts in July and a
bigger-than-expected decline in producer prices. []
[]
A softer dollar benefits gold, which is sometimes used as a
hedge against weakness in the U.S. currency. It also becomes
cheaper for holders of other currencies as the dollar slips.
The wilting stock markets and recovering dollar also led to
losses in bellwether commodity crude oil, which slipped after
earlier ticking up more than 1 percent. Base metals also pared
earlier gains. [] []
Gold often tracks crude prices, as it can be bought as a
hedge against oil-led inflation.
DEMAND SOFT
Physical demand for gold lent little support, with holdings
of the largest gold-backed ETF, the SPDR Gold Trust, unchanged
on Monday. Elsewhere data showed India's gold imports fell 68
percent year-on-year in July. [] []
However, INTL Commodities analyst Gerry Schubert said
physical demand was being seen from Turkey and the Middle East,
and he expects Indian gold buying to pick up towards the end of
the month.
Among other precious metals, silver <XAG=>, which plummeted
more than 5 percent to session lows on Monday, eased to $13.86
an ounce against $13.96. Because it is a smaller market than
gold, silver's trading pattern is often more volatile.
"Silver is always the one where, on the upside and on the
downside, any move will be exaggerated," Schubert said.
Platinum <XPT=> was at $1,216 an ounce against $1,220, and
palladium <XPD=> was at $267 against $265. Prices of the metals
used in autocatalysts fell on Monday but remain up 2 percent and
3 percent respectively this month.
"A weaker yen has prompted bargain hunter interest
overnight, and for the moment both should hold their current
trading ranges of $1,215-96 and $264-82," said James Moore, an
analyst at TheBullionDesk.com.
(Editing by Sue Thomas)
