* Dollar index edges higher, reversing early losses
* Oil prices off highs but still firm
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 18 (Reuters) - Gold edged lower in Europe on
Thursday, pressured by gains in the dollar, but trading was
muted ahead of U.S. data due later in the session.
Traders are awaiting U.S. weekly jobless claims at 1230 GMT
and May leading indicators and the Philadelphia Fed June
business activity index at 1400 GMT for their impact on the
currency markets.
Spot gold <XAU=> was bid at $936.25 an ounce at 1048 GMT,
against $938.40 an ounce late in New York on Wednesday.
"The commodities sector as a whole is a little bit choppy
right now, despite the short corrections that we've seen over
the last few days," said Tom Kendall, precious metals strategist
at Mitsubishi Corp.
"There is still a bit of a downward bias across the broader
metals and energy sector, but the dollar is what's driving most
of it...Unless there are any surprises from the U.S. data, gold
needs something fresh to drive it higher."
The dollar <.DXY> reversed early losses to firm 0.25 percent
to 80.5 percent against a basket of other currencies, and
declined versus the euro as losses on European equity markets
pressured the single currency. []
Oil meanwhile gave up some of its early gains, also
pressured by the dollar's recovery, though it remained supported
by 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.
Equities continued falling, 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 would launch a
new combined gold, silver and platinum fund. []
Spot platinum <XPT=> was at $1,200.50 an ounce against
$1,201, while palladium <XPD=> was at $240 against $240.50.
Platinum 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 $14.26 an
ounce against $14.32. Holdings of the world's largest silver
ETF, the iShares Silver Trust <SLV>, remained at record levels
on Wednesday.
(Additional reporting by Kylie MacLellan; Editing by Sue
Thomas)
