* Equity recovery, Trichet comments help euro vs dollar
* Oil retraces losses
* Silver hits 10-week low, pressured by dollar, base metals
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By Jan Harvey
LONDON, July 13 (Reuters) - Gold steadied in Europe on
Monday as the dollar weakened against the euro after a recovery
in European stocks, and oil recovered early losses.
Silver slipped to a 10-week low in early trade as a fall in
industrial metals added to downward pressure exerted by weaker
gold prices, and may face fresh losses if the dollar firms.
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Spot gold <XAU=> was bid at $912.60 an ounce at 1151 GMT,
against $912.15 an ounce late on Friday, having earlier touched
a low of $908.20. The dollar's dip is boosting gold's appeal as
a hedge against weakness in the U.S. currency. []
"The dollar has slipped against the euro, so that has been
supportive, enabling gold to pick off the lows," said Societe
Generale analyst David Wilson.
The U.S. currency reversed early gains against the euro as
European stocks turned positive after initial losses, and after
comments from ECB chief Jean-Claude Trichet at a seminar in
Munich. []
A weaker U.S. unit makes dollar-priced commodities,
including gold, cheaper for holders of other currencies, and
boosts interest in bullion as a currency hedge.
The dollar has re-emerged as the chief driver of the gold
price in recent months, after taking a back seat to risk
aversion and falling stocks earlier in the year.
On other markets oil, the bellwether of the commodities
group, swung into the black after prices earlier slipped more
than $1 a barrel as falling equities pressured the market. []
European equities also turned positive in midday trade on
Monday after hitting an 11-week earlier in the day, as U.S.
stock futures cut early losses. []
VULNERABLE
Gold, which fell 2 percent last week as dollar strength and
losses in other commodities pressured prices, was seen as
vulnerable to further losses from here, with the $900 an ounce
level of support keenly eyed.
"I don't expect prices to stabilise here," said Commerzbank
analyst Eugen Weinberg. "We will see a stronger dollar, and we
will see gold below $900, which will trigger further technical
selling."
Inflows into gold-backed exchange-traded funds have eased
dramatically since the first quarter.
Holdings of the largest, New York's SPDR Gold Trust <GLD>,
were unchanged for a second consecutive session on Friday,
though the smaller European ETFs have reported some activity in
recent weeks. []
Other precious metals also slipped, with silver tracking
gold and base metals down to hit a fresh ten-week low of $12.45
an ounce. It was later at $12.52 an ounce against $12.65. The
gold-silver ratio has risen to 73 from about 62 in early May.
"The decline in the Comex net speculative long position has
accompanied an increase in the gold/silver ratio," said UBS
analyst John Reade in a note. "Further long liquidation on Comex
could see this ratio back up towards 80."
Silver's 5 percent price fall last week has helped take its
14-day relative strength index -- a measure of how overbought or
oversold a commodity is, with an RSI of 30 or less suggesting a
metal's price fall has gone too far -- to under 15 on Monday.
Meanwhile platinum <XPT=> was at $1,091.50 an ounce against
$1,104.50, while palladium <XPD=> was at $231 against $232.
(Reporting by Jan Harvey; Editing by William Hardy)
