* Dollar index reverses earlier losses
* Oil prices steady, giving up earlier gains
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, June 18 (Reuters) - Gold edged lower in Europe on
Thursday as a recovery in the dollar dented interest in the
metal as a hedge against weakness in the U.S. currency.
Spot gold <XAU=> was bid at $936.80 an ounce at 1028 GMT,
against $938.40 an ounce late in New York on Wednesday.
The dollar <.DXY> reversed early losses to rise 0.23 percent
to 80.4 against a basket of other currencies, and firmed against
the euro as the single currency was pressured by losses in
European shares. []
"The greenback is currently gaining ground against the euro
and this is putting some pressure on the metal," said Alexander
Zumpfe, a trader at precious metals house Heraeus.
Oil prices meanwhile gave up some of their early gains, also
pressured by the dollar's recovery, though they remained firm on
bullish data on Chinese and U.S. fuel inventories. []
Strength in the U.S. currency makes all dollar-priced
commodities, including gold and oil, more expensive for holders
of other currencies.
Traders will be watching U.S. data due later in the day --
including weekly jobless claims at 1230 GMT, and May leading
indicators and the Philadelphia Fed June business activity index
at 1400 GMT -- for its impact on the currency markets.
Elsewhere equities continued their decline, helping offset
downward pressure on gold.
European shares reversed initial gains to turn negative.
Asian markets slipped on quarter-end profit-taking, and world
stocks stabilising near a three-week low they hit on Wednesday.
"(Gold) prices remain high despite profit taking in equity
markets, as investors continue to hold large cash ... reserves,"
said Fairfax analyst John Meyer in a note.
INFLOWS
Investor interest in gold remains firm, though inflows into
bullion-backed exchange-traded funds have tailed off since
reaching highs at the beginning of 2009. Holdings of the SPDR
Gold Trust, the largest gold ETF, are still near record levels.
Highlighting growing interest in precious metals, Canada's
Brompton Funds Management said on Wednesday it is set to launch
a new combined gold, silver and platinum fund. []
Spot platinum <XPT=> was at $1,200 an ounce against $1,201,
while palladium <XPD=> was at $241 against $240.50.
Platinum briefly slipped below $1,200 an ounce for the first
time since 1 June on Wednesday, but quickly recovered from lows
as investors took advantage of lower prices to buy the metal.
"As with gold and silver, dip buying should continue to
offer support for platinum in the coming sessions," said James
Moore, an analyst at TheBullionDesk.com.
Among other precious metals, silver <XAG=> was at $14.27 an
ounce against $14.32. Holdings of the world's largest silver
ETF, the iShares Silver Trust <SLV>, remained at record levels
on Wednesday.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
