* Gold slightly weaker with oil
* Weaker dollar brings gold off early lows
* Platinum supported by South African power shortage
(Recasts, updates prices, adds comment)
By Jan Harvey
LONDON, June 17 (Reuters) - Gold slipped a touch on Tuesday
as oil languished, but recovered from session lows as the dollar
softened against the euro after disappointing U.S. economic
data.
Gold <XAU=> was at $881.90/882.90 an ounce at 1442 GMT,
against $883.60/884.80 an ounce late in New York on Monday.
The precious metal came under pressure in earlier trade as
traders took profits after a strong session on Monday, when gold
jumped as high as $894.70 an ounce on the weaker dollar.
A dip in crude prices after Monday's record highs dampened
sentiment towards the precious metal, which is often bought as a
hedge against oil-led inflation.
"If oil prices are poised for a potential fall, players are
going to hold back from buying gold in anticipation of that,"
said Fairfax IS analyst John Meyer.
Crude slipped after Monday's all-time high of $139.89, as
investors took profits ahead of a meeting of oil producers and
consumers in Saudi Arabia this weekend. []
However, the market was still supported by weakness in the
dollar. The U.S. currency slipped against the euro on Monday as
U.S housing starts fell and after in-line producer price
inflation numbers.
The data were interpreted as reducing the chances of an
early U.S. rate hike from the Federal Reserve. []
A softer dollar typically benefits gold, which is often
bought as an alternative investment to the U.S. currency.
However, uncertainty remained over the future path of the
dollar, which has fluctuated over the last week as investors
debate the likelihood of rate hikes.
"There is a bit of uncertainty about the direction the
dollar is going to take," said Michael Widmer, an analyst at
Lehman Brothers. "We are still waiting for more data which might
have an impact on that."
"Overall, looking at what we're seeing in the market, there
is no clear signal for (gold) prices either way," he added.
Among other precious metals, silver <XAG=> edged down to
$17.01/17.07 an ounce from $17.16/17.22 late in New York on
Monday, when it jumped to a one-week high of $17.40 due to a
weaker dollar and gains in gold.
Spot platinum <XPT=> rose to $2,052.00/2,062.00 an ounce
from $2,038.50/2,058.50 late in New York.
Earlier on Tuesday, Zurich Cantonal Bank (ZKB) told Reuters
its platinum exchange-traded fund has grown 45 percent in volume
terms from February to a record 62,300 ounces.
Increased car buying is fuelling demand for the metal, which
is used in autocatalysts, while supply remains problematic after
a power shortage hit major producer South Africa earlier this
year, the bank said.
"The platinum market has the strongest fundamentals in the
near term, as the power problems in South Africa keep the market
on tenterhooks," said Barclays Capital in a note.
Spot palladium <XPD=> was steady at $455.00/463.00 an ounce
against $456.50/464.50. It hit a high of $460 an ounce on
Monday, its strongest level since April 18.
(Reporting by Jan Harvey; editing by Christopher Johnson)
