* Dollar turns lower vs the euro after U.S. jobs, trade data
* India's gold buyers welcome lower prices
* SPDR gold ETF holdings steady after heavy outflow
(Updates prices)
By Jan Harvey
LONDON, Dec 10 (Reuters) - Gold edged lower on Thursday as
the dollar recovered losses it made after from data showing a
narrower-than-expected U.S. trade deficit and better continuing
jobless claims cut risk-driven buying of the U.S. unit.
Spot gold <XAU=> was bid at $1,123.05 an ounce at 1611 GMT,
against $1,128.80 late in New York on Wednesday.
Analysts say while the upward trend in gold that took the
metal to record highs at $1,226.10 an ounce a week ago is
intact, it is unlikely to revisit those levels before January.
"Year-end considerations, book squaring, argue for further
dollar strength, which will keep gold under pressure," said
Calyon analyst Robin Bhar.
"As we go into the new year, with fresh allocations, gold is
one of the commodities that will be in favour due to a whole
host of longer-term positive factors."
Gold's performance will be dependent on further losses in
the dollar. The dollar fell against the euro on Thursday after a
narrower-than-expected U.S. trade deficit for October and some
improvement in jobless claims, but later recovered. []
Weakness in the U.S. unit boosts gold's appeal as an
alternative asset, and makes dollar-priced commodities cheaper
for holders of other currencies.
Private banking group Pictet said on Thursday that gold was
one of its preferred picks for 2010.
"Gold is the only asset class currently in a secular
(long-term) bull market. It will continue to rally as long as
confidence in currencies continue to be eroded. This will last
for at least four to five years," said chief investment officer
Yves Bonzon, who sees gold reaching "at least" $2,000 an once by
2015. []
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange firmed $3.20 to
$1,124.10 an ounce.
UNCERTAINTY REIGNS
Fears over the economic outlook and sovereign debt will also
continue to support gold, analysts said.
"There is still a lot of uncertainty next year, which will
support the precious metals," said Saxo Bank senior manager Ole
Hansen. "Gold will definitely have a decent upside and we will
see new highs in the new year."
Among other commodities, oil steadied near $71 a barrel on
Thursday after sliding more than 2 percent to a two-month low a
day earlier. Gold tends to track crude prices, as the metal can
be bought as a hedge against oil-led inflation. []
Elsewhere, the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust, said its holdings were unchanged on
Wednesday after an outflow of nearly 14 tonnes a day before,
their biggest drop since July. []
In India, the world's biggest bullion consumer last year,
dealers say buyers are being tempted back into the market after
gold's $100 an ounce retreat from record highs. []
"People are buying on dips," said a dealer at a Mumbai bank.
High prices have weighed heavily on demand for gold this
year in key jewellery buying centres like India and the Middle
East. Global jewellery demand fell by more than a fifth in the
first half of 2009, according to the World Gold Council.
In supply news, South Africa, a major gold producer, said
its output of the precious metal fell 5.8 percent year-on-year
in October. []
Meanwhile platinum <XPT=> was at $1,415 an ounce against
$1,416.50, while palladium <XPD=> was at $360 against $362.
Silver <XAG=> was bid at $17.20 an ounce against $17.38.
(Editing by Keiron Henderson)
