* Stronger dollar offsets boost from consumer demand
* Silver, pgms also under pressure
* China GDP, inflation data due Jan 20
(Updates throughout with comment; refreshes prices; changes
byline and dateline, pvs SINGAPORE)
By Amanda Cooper
LONDON, Jan 17 (Reuters) - Gold steadied around $1,360 an
ounce on Monday, stabilising after posting a second successive
weekly fall last week, as a stronger dollar tempered some of the
gains made from consumer demand for bullion.
The gold price has retreated by more than 4 percent since
the start of the year, driven lower by declining investment,
renewed optimsm over the U.S. economic outlook and a more robust
dollar, which undercuts gold's appeal to non-U.S. buyers.
Holdings of gold in the world's largest bullion-backed
exchange traded fund fell to their lowest since June 3 on
Monday, while speculators cut their holdings of U.S. gold
futures to their lowest since April 2010 last week. []
<0#CFTC>
Spot gold <XAU=> was last flat at $1,359.50 an ounce by 1012
GMT, having touched a one-week low of $1,354.99 on Friday and
having fallen by more than U.S. gold futures <GCG1> were down
0.1 percent at $1,359.50.
"If you take a three- to 12-month view, it will still be at
higher (price) levels, but in the short term, gold is going to
find it difficult to rally," said Standard Bank analyst Walter
de Wet.
"We have seen the dollar depreciate last week and gold
hasn't really reacted to that, but consolidation is certainly
our view and we see physical demand on price dips below $1,360,
which should support gold," he said.
The euro fell broadly on Monday on fading expectations that
talks on the euro zone's sovereign bailout fund will provide any
meaningful way to solve the region's debt problems. []
The dollar edged up against a basket of currencies <.DXY>.
The U.S. economy still needs support from the Federal Reserve
even as recent data point to firmer growth prospects, top
officials at the Federal Reserve said. []
CHINA IN FOCUS
China's central bank raised lenders' required reserves on
Friday for the fourth time in just over two months, stepping up
the fight against inflation that it has vowed will be a top
priority for the year. []
Market players are awaiting a suite of data from Beijing due
on Thursday, including December inflation and fourth-quarter
economic growth, which might give clues on how much tightening
would be needed in the next few months. [] <ECONCN>
But economic conditions in the U.S. and Europe will be a
more decisive factor behind gold prices, some analysts said.
Physical demand stayed robust ahead of the Lunar New Year
celebrations in early February, and bargain hunting materialised
in the Asian market after prices dropped and spot supply
remained tight, dealers said.
But the combination of a stronger dollar, weaker investment
interest and rising bond yields, especially in the United
States, have undermined some of the positive sentiment that
resurfaced late last year towards gold.
"The market mood feels a lot more negative than the price
action so far. After all, gold remains just $70 from its
all-time highs," wrote UBS strategist Edel Tully.
"And as last week ended, gold's previous negative
correlation to the dollar entirely broke down, with gold and the
dollar falling together."
In more upbeat fundamental news for gold, Gitanjali Gems Ltd
<GTGM.BO>, India's biggest jewellery retailer, says it expects
to boost sales to about $2 billion this year from $1.55 billion
in 2010 and aims to expand in Italy and China. []
With gold looking more fragile, silver also came under
pressure, falling for a third day in a row, by more than 1
percent to its lowest in a month.
Spot silver <XAG=> was last at $28.12 an ounce, compared
with $28.42 late in New York on Friday.
Platinum <XPT=> came under more modest pressure, declining
by 0.25 percent to $1,804.49 an ounce, but remained within 1
percent of last week's 30-month high at $1,826.74.
Palladium <XPD=> was down around 1 percent at $783.85 an
ounce, having risen last week to its highest in ten years.
(Additional reporting by Rujun Shen in Singapore; editing by
Keiron Henderson)
