* Dollar regains ground against a basket of currencies
* Oil prices ease after gaining 5 percent on Thursday
* Firm demand for physical gold underpins prices
(Recasts, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 22 (Reuters) - Gold prices slipped on Friday as
the dollar recovered some losses against the euro, but firm
demand from investors in physical bullion supported the market.
Gold <XAU=> edged down to $828.00/829.00 an ounce in
European trade by 1006 GMT from $832.40/833.40 an ounce late in
New York. New York gold futures for December delivery <GCZ8>
slipped $3.70 an ounce to $835.30.
"Right now, I would distinguish between longer-term
investors and smaller investors who believe jewellery demand is
going to pick up in the next few months, and speculative holders
who are getting out of the market," said Commerzbank analyst
Eugen Weinberg.
The dollar recovered against a basket of currencies on
Friday, dampening earlier gains in the precious metal. Gold is
often bought as an alternative investment to the dollar, and
tends move in the opposite direction to it.
Traders paused in their profit taking on the U.S. currency
ahead of a speech from Federal Reserve chairman Ben Bernanke
later in the session. []
Oil prices also slipped after surging nearly 5 percent on
Thursday, its biggest percentage gain in more than two months,
as tensions between Russia and the U.S. escalated. Crude slid
below $121 a barrel on Friday. []
However, analysts were positive for the outlook for gold.
"A longer period of consolidation in the $800-$840 (range)
would help gold establish a much stronger base, offering the
physical base more time to adjust to higher prices," said
TheBullionDesk.com analyst James Moore.
The precious metal surged on Thursday to a one-week high of
$839.00 as dollar weakness fuelled interest in commodities as an
asset class, and as demand for physical gold soared.
The Reuters/Jeffries CRB <.CRB> global commodities index is
on track for its biggest weekly gain since 1975. []
DEMAND FOR COINS, BARS SURGES
Although it is currently on the back foot, gold is up around
$60 an ounce from the nine-month low of $773 it reached last
Friday, as investors in coins and bars piled back into the
market.
The U.S. mint said in a statement on Thursday that it was
temporarily suspending sales of its American Eagle bullion coins
due a shortage as demand soared. []
European traders also reported that producers were
struggling to keep up with demand for some finished products.
"This shows there is real demand (for gold)," said Weinberg.
"Now we have tensions between Russia and NATO, we have
financial market risk," he said. "U.S. real interest rates are
still negative, which makes the opportunity cost of holding gold
lower. There are so many reasons for gold to become stronger."
Among other precious metals, silver <XAG=> slid to
$13.59/13.65 an ounce from $13.80/13.87 an ounce.
Spot platinum <XPT=>eased to $1,440.00/1,460.00 an ounce
from $1,449.50/1,469.50 an ounce late in New York, having hit a
1-week high of $1,472.50 an ounce earlier on Friday.
Its sister metal palladium <XPD=> inched up to
$287.50/295.50 an ounce from $286.00/294.00 an ounce.
Both the platinum group metals are recovering after
suffering a major sell-off in the wake of a spate of bad
financial reports from carmakers, who consume around half of the
world's platinum each year.
Analysts feared lower demand from carmakers could weigh on
prices later in the year. Both metals however are benefiting
from renewed buying interest as prices reach lower level.
(Reporting by Jan Harvey; editing by Christopher Johnson)
