* Gold slips as dollar rebounds after Trichet comments
* Oil climbs $2 a barrel as supply concerns fuel buying
* Platinum, palladium steady after turbulent trade
(Recasts, adds comment, updates prices)
By Jan Harvey
LONDON, Aug 7 (Reuters) - Gold slipped on Thursday as the
dollar rebounded against the euro after European Central Bank
president Jean-Claude Trichet said he expects growth to weaken
this year.
Platinum steadied after a rise in prices fuelled by strike
action in South Africa on Wednesday ended a three-session slide
that drove prices down some $180 an ounce to six-month lows.
Gold <XAU=> slid to $872.10/873.10 an ounce at 1405 GMT from
$878.70/879.90 late in New York. Earlier this week the precious
metal dropped to a seven-week low as part of a broader
commodities sell-off fuelled by a firmer dollar.
The euro slipped against the dollar after ECB president
Jean-Claude Trichet said he saw downside risks to economic
growth in the euro zone, reducing the prospect of a rate hike in
the near future. []
"There is less and less likelihood that the ECB will hike
rates... and of course that is weighing on the euro," said
Dresdner Kleinwort consultant Peter Fertig. "(That) leads to a
firmer U.S. dollar, which is negative for gold."
"As we fully expect that the euro is going to weaken
considerably, we expect gold will remain under pressure," he
added.
Gold typically moves in the opposite direction to the
dollar, as it is often used as a hedge against weakness in the
U.S. currency.
Oil, the other main external driver of gold, climbed more
than $2 a barrel, recovering from three-month lows, as supply
concerns fuelled buying, outweighing fears slowing U.S. economic
growth could dampen demand. []
Firmer crude prices usually benefit gold, which can be
bought to hedge against oil-led inflation. While Thursday's
price rise supports gold, analysts warn the oil market remains
fragile.
"The crude market seems vulnerable towards a further
correction," said Saxo Bank analyst Philip Carlsson. "However,
as long as crude stays above (the $117 a barrel support) level,
it will support gold."
DEHEDGING SET TO SLOW
Analysts fear gold prices could be set to lose a key source
of support as the rate slows at which miners buy back gold they
have sold forward. The process, known as dehedging, has been a
key source of demand in recent years.
Gold miners cut their hedging positions by 16 percent in the
second quarter of 2008, but the rate of dehedging is likely to
slow in the second half of the year, a report sponsored by
Fortis Bank said on Thursday. []
Among other precious metals, platinum posted small losses in
sympathy with gold, but was largely steady after Wednesday's
price rise, which snapped a three-session, $180 run of losses.
While traders remain worried about the outlook for the car
industry, source of 50 percent of platinum demand, Wednesday's
strike among South African workers has refocused attention on
supply issues.
"Losses in this market have been overdone, especially given
the potential threats to supply (that remain), particularly in
South Africa," said Barclays Capital in a note.
Spot platinum <XPT=> edged down to $1,585.50/1,605.50, from
$1,594.50/1,614.50 late in New York on Wednesday.
Spot palladium <XPD=> was little changed at $347.50/355.50
an ounce from $349.50/357.50 late in New York. Silver <XAG=>
slipped to $16.23/16.29 an ounce from $16.51/16.57.
(Reporting by Jan Harvey; Editing by Michael Roddy)
