* Dollar index slips back into positive territory
* Oil prices swing higher as weak dollar supports
(Updates prices, adds comment)
By Jan Harvey
LONDON, June 18 (Reuters) - Gold eased a touch in Europe on
Thursday as the dollar index ticked back into positive
territory, but remained hemmed into narrow ranges as traders
awaited fresh direction from the currency markets.
Spot gold <XAU=> was bid at $936.90 an ounce at 1448 GMT,
against $938.40 an ounce late in New York on Wednesday. U.S.
gold futures for August delivery <GCQ9> on the COMEX division of
the New York Mercantile Exchange rose $1.90 to $937.90 an ounce.
"We are still stuck in a range," said Afshin Nabavi, head of
trading at MKS Finance in Geneva. "As long as $950 on the upside
or $925 on the downside does not break, it will remain dull,
following the U.S. dollar."
The dollar had extended losses against the euro after an
index of business expectations in the U.S. mid-Atlantic region
came in well above expectations, boosting appetite for higher
yielding currencies seen as higher risk. The currency later
steadied [].
Volatility in the currency markets amid speculation of
market intervention by the Bank for International Settlements is
also supporting appetite for gold as a haven from risk.
Fresh dollar weakness also helped oil prices reverse losses
to move back into positive territory. Gold often tracks crude,
as it can be bought as a hedge against oil-led inflation. []
Weakness in the U.S. currency makes all dollar-priced
commodities, including gold and oil, cheaper for holders of
other currencies.
"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," he said.
BOOSTED HOPES
On other markets, Wall Street stocks climbed after the U.S.
business conditions data, which boosted hopes the economy may be
recovering. European shares also moved into positive territory
after earlier losses.
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.
Spot platinum <XPT=> was at $1,206 an ounce against $1,201,
while palladium <XPD=> was at $240 from $240.50.
Platinum slipped below $1,200 an ounce for the first time
since June 1 on Wednesday, but quickly recovered from lows as
investors took advantage of lower prices.
"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.
Production issues are also raising their head. South
Africa's biggest mineworkers' union told Reuters on Thursday its
members were prepared to down tools to win a wage rise, but
hoped for a deal to avert a strike. []
Four-fifths of the world's platinum is mined in the country.
Silver <XAG=> was at $14.20 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 Anthony
Barker)
