* Dollar hits 8-week low vs euro, 2009 trough vs FX basket
* Share prices, oil climb as risk appetite increases
* Palladium at 7-week high; platinum near 6-week peak
* South Africa's mining union reaches wage deal
(Adds detail, comment; updates prices)
By Jan Harvey and Martina Fuchs
LONDON, July 28 (Reuters) - Gold rose in Europe on Tuesday,
as the dollar depreciated and fresh gains in equity markets
boosted appetite for riskier assets, while platinum and
palladium held near multi-week highs.
Spot gold <XAU=> was bid at $953.75 an ounce at 1126 GMT,
against $952.65 an ounce late in New York on Monday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange rose 50 cents to $954.00 an ounce.
Spot prices remained within a $945-960 range for a sixth
straight session, as investors stuck to the sidelines during the
seasonally weak summer period.
According to analyst Walter de Wet at Standard Bank, the
longer gold remains confined to its current range, the greater
the possibility of it eventually breaking lower.
"At these levels the bias is the downside for gold," he
said. "It is going to be tough for gold to move higher."
"If the dollar continues to soften it is going to support
the gold price, but even then, if we close in on $1,000 an
ounce... we will see a reaction from the physical side and more
scrap coming onto the market," he said.
The dollar slid to an eight-week low against the euro <EUR=>
and its weakest this year versus a basket of currencies <.DXY>.
Gold, like other dollar-priced commodities, becomes cheaper for
holders of other currencies as the U.S. unit weakens. []
European shares <> rose after posting their highest
close since November on Monday on expectations of more strong
second quarter earnings, helping lift oil above $68 a barrel.
[]
Rising crude prices can support gold, which is often seen as
a hedge against oil-led inflation. []
In supply news, the South African mineworkers' union told
Reuters it had accepted the latest wage offers from gold and
coal companies, averting a strike in the mining sector. South
Africa is the world's third biggest gold producer. []
PALLADIUM HIGH
The smaller platinum group metals (PGMs), palladium and
rhodium, performed strongly on Tuesday after their sister metal
platinum hit a six-week high on Monday as the weaker dollar and
strength in gold prices underpinned gains.
Palladium <XPD=> climbed to a seven-week high of $263 an
ounce on Tuesday, tracking platinum higher, while rhodium
<RHOD-LON> rose another $75 to $1,675 an ounce.
"Palladium has been the underperformer of the major PGMs
over last 12 months. But there has been buying alongside the
rises we have seen in platinum and gold over the last two to
three weeks," Rory McVeigh, a PGM trader at Commerzbank, said.
All three metals, which are primarily used in the auto
industry as components in catalytic converters, have suffered
from a fall in car demand over the last year.
But McVeigh said there were tentative signs of recovery.
"Carmakers are beginning to see light at the end of the
tunnel and begin to look at 2010/11 when they will be needing
this metal again," he said.
"The shift away from diesel engines to small cars for
efficiency has also played into palladium's pricing."
Platinum <XPT=> was at $1,211 an ounce against $1,215, while
palladium was at $260.50 against $259. Elsewhere silver <XAG=>
was at $13.98 an ounce versus $14.01, having earlier matched the
previous session's four-week high of $14.08.
(Reporting by Jan Harvey and Martina Fuchs; Editing by Peter
Blackburn)
