* Ireland seen nearing multi-billion euro deal with EU, IMF
* Euro continues recovery vs. dollar, seen building on gains
* China lifts banks' reserve requirements once more
* Indian gold demand strong after prices dip from record
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Nov 19 (Reuters) - Gold prices climbed in Europe on
Friday, building on the previous session's gains, as
expectations that Ireland is near a multi-billion euro deal to
help its beleaguered banks lifted the euro.
Spot gold <XAU=> was bid at $1,360.00 an ounce at 1042 GMT,
against $1,352.65 late in New York on Thursday. U.S. gold
futures for December delivery <GCZ0> rose $6.70 to $1,359.70.
Gold rose by the most in two weeks on Thursday, breaking a
four-day losing streak, as hopes for a plan first emerged.
Expectations that the dollar will weaken further against the
euro are set to continue lifting the metal, analysts said.
"With the Fed continuing to vouch for QE2, dollar weakness
will continue to persist, and along with that, a possible
solution to the Irish debt crisis has resulted in a firmer
euro," said Richcomm Global Services analyst Pradeep Unni.
"These two factors will continue to provide a bullish bias
to the metal in the near term. The only fear lingering around is
a potential rake hike from China, which, though (it) is almost
discounted, fails to dissipate completely.
China said it would raise banks' reserve requirements by 50
basis points from Nov. 29 on Friday. Commodity prices tumbled
earlier this week on fears the government would lift rates after
inflation hit a 25-month high in October. []
However, the news did not have a significant impact on the
gold market. "The market now is well attuned to the fact that
the Chinese need to tighten monetary policy in various ways,"
said Credit Suisse analyst Tom Kendall.
The euro <EUR=> continued its recovery on Friday, building
on the previous day's near 1 percent gains versus the dollar,
amid talk of a deal between Dublin, its European partners and
the IMF over an aid package that may be worth tens of billions
of euros. []
Dublin said discussions would run into next week, and
Finance Minister Brian Lenihan told parliament it was not yet at
the point of requesting a loan.
PHYSICAL BUYERS HUNT BARGAINS
On the physical side of the market, Asian buyers hunted
bargains after prices dropped from the record high levels hit
last week, with demand from top consumer India picking up due to
the ongoing wedding season. []
"We saw buying interest below $1,350 in the region (Asia),
as people are betting on price rise to $1,500 next year," said
one Hong Kong-based dealer. Spot gold prices hit a record
$1,424.10 an ounce last week.
But demand for gold-backed exchange-traded funds continued
to be soft, with holdings of the world's largest gold ETF, the
SPDR Gold Trust <GLD.P>, declining 4.6 tonnes to a one-month low
of 1,286.299 tonnes on Thursday. []
Elsewhere silver <XAG=> was bid at $27.17 an ounce against
$26.92, while platinum <XPT=> was at $1,657.50 an ounce against
$1,662 and palladium <XPD=> was at $699 against $693.72.
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For a graphic showing the relative price performance of key
commodities this year, click on: http://r.reuters.com/baf29p
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Prominent commodities investor and hedge fund manager Dwight
Anderson said on Thursday that platinum output has possibly
peaked as the precious metal gets harder to mine, and prices are
likely to rise to record highs. []
However, Standard Chartered said in a report that it
favoured palladium over platinum. "We believe there is more
upside for platinum prices in the year ahead, but the uptrend is
unlikely to be smooth," it said.
"We still believe that palladium is likely to outperform
platinum in the year ahead," it added. "A strong auto sector in
China and the U.S. should keep prices on an upward track."
(Reporting by Jan Harvey; Editing by Alison Birrane)
