* Dollar ticks higher as risk appetite recedes
* SPDR gold ETF posts fresh outflow
* Platinum, palladium retreat from multi-week highs
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, July 29 (Reuters) - Gold eased in Europe on
Wednesday as the dollar firmed, prompting losses across
commodities, with currencies seen as higher risk coming under
heavy selling pressure after recent gains.
The precious metal has risen from a low of $932.70 an ounce,
however, as the dollar pared gains after European markets
reversed initial losses to tick higher.
Spot gold <XAU=> was bid at $936.35 an ounce at 0822 GMT,
against $936.65 an ounce late in New York on Tuesday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange slipped $2.50 to $936.60 an ounce.
Precious metals fell along with many other commodities, such
as oil, copper and zinc, after a 5 percent slide in Chinese
equities dented risk appetite and lifted the dollar against a
basket of currencies. [] []
"The dollar is seen as a safe haven, so if... people feel
assured about recovery, they are happy to sell the dollar and
buy risk assets such as commodities," said Citigroup analyst
David Thurtell.
"If you have wobbles over China, the dollar picks up, and
commodities come off," he said.
Chinese stocks dropped 5 percent on Wednesday, their biggest
daily drop in eight months, amid worries banks were set to
restrict lending. European shares also opened lower, though they
later clawed back losses. []
Oil prices slid nearly 2 percent, while industrial metals
such as copper and zinc also posted losses. []
SLOW DEMAND
Investment demand for gold remained lacklustre, with a
further 3.36-tonne outflow from the world's largest
bullion-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
adding to a recent retreat in ETF holdings. []
Physical demand for gold remains soft overall, with seasonal
weakness and high prices hurting consumption in the key Indian
and Middle Eastern markets. This weakness in underlying demand
makes gold vulnerable to a sell-off, analysts said.
"Given the recent build in speculative longs and ETF
redemptions yesterday, combined with very limited physical
interest, gold remains vulnerable to a deeper correction," said
James Moore, an analyst at TheBullionDesk.com, in a note.
On the supply side, Russia's Polyus Gold <PLZL.MM> said its
output of the precious metal fell 14 percent year-on-year in the
first half, due to declining ore grades. []
Among other precious metals, platinum <XPT=> was at
$1,187.50 an ounce against $1,192.50 late on Tuesday, while
palladium <XPD=> was at $255 against $256.50.
The two metals climbed to multi-week highs earlier this week
as firmer stocks boosted hopes demand for the autocatalyst
materials would pick up. However, analysts say the uptick in the
dollar is being used as an opportunity to take profits.
Silver <XAG=> was at $13.58 an ounce against $13.69.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
