* Gold firms as oil prices rise
* Dollar edges up vs euro but awaits data for further moves
* European Central Bank sold 30 tonnes of gold on Jun 30
(Recasts, adds comments, updates prices, pvs SINGAPORE)
By Jan Harvey
LONDON, July 1 (Reuters) - Gold edged higher in Europe on
Tuesday, supported by firm crude oil prices which encourage
buying of the precious metal as an inflation hedge.
Traders are awaiting direction from currency markets which
are likely to react to U.S. manufacturing activity data due
later on Tuesday, and the European Central Bank's decision on
interest rates later this week.
Gold <XAU=> rose to $927.70/928.70 an ounce at 0911 GMT from
$925.95/927.15 in New York late on Monday.
"We have many supportive factors for gold out there right
now," said Eugen Weinberg, an analyst at Commerzbank. "We have
high oil prices and stronger inflation fears worldwide, and the
fact that gold is now over $900 is also supporting the price."
"Tehcnically gold is looking healthy, and there is probably
some speculative investment interest coming out because of
that," he added.
The precious metal hit a high of $935 on Monday, its
strongest since May 22, after oil hit another record high,
spurring buying as the first half of the year came to a close.
However, a bounce in the dollar later in the session put the
metal under pressure. Gold is often bought as a currency hedge
and therefore trades in the opposite direction to the greenback.
The dollar was steady against the euro on Tuesday, awaiting
fresh direction from U.S. manufacturing data.
Traders are also looking ahead to the ECB's upcoming
decision on interest rates, due Thursday.
"Should the US dollar weaken in the event of higher euro
zone interest rates, then gold prices are likely to strengthen,"
said HSBC analyst James Steel in a note.
Meanwhile oil prices resumed their move higher, trading up
nearly $2 a barrel at their session high on Tuesday as fears
over tensions between Iran and Israel fuelled buying.
[]
In fundamental news, the ECB said on Tuesday it completed
gold sales of 30 tonnes on June 30, and added that it had no
plans to sell more gold in this year of the agreement, which
runs until September. []
Among other precious metals, spot platinum <XPT=> rose to
$2,067.00/2,087.00 an ounce from $2,060.00/2,080.00 late in New
York. The metal is benefiting from expectations a smelter
shutdown at major platinum producer Lonmin will affect supply.
Spot palladium <XPD=> was steady at $463.00/468.00 an ounce
against $459.00/467.00, while silver <XAG=> edged up to
$17.50/17.55 an ounce from $17.38/17.43 late in New York.
Mine workers in Peru, the world's biggest miner of silver,
joined a nationwide strike on Monday to demand that Congress
pass a bill guaranteeing them a greater share of profits from
rising metals prices. []
The strike has hit Uchucchacua, one of the country's largest
silver mines, although production is not thought to have been
affected, according to Venezuelan mining company Buenaventura.
<BUEv.LM>
(Reporting by Jan Harvey: Editing by Peter Blackburn)
