* Indian physical buying props up bullion prices
* Dollar crucial, safe-haven buying boost gold
* SPDR Gold holdings hold steady
(Recasts lead, updates prices, adds detail/comment)
By Michael Taylor
LONDON, Jan 19 (Reuters) - Gold rose to around $1,100 an
ounce in Europe on Monday as the dollar eased broadly, while
renewed physical and safe-haven buying also helped support
prices.
Gold <XAU=> was bid at $1,097.90 an ounce by 1257 GMT,
against $1,091.65 an ounce on Friday, having earlier touched a
high at $1,103.80. U.S. gold futures for February delivery
<GCG0> were at $1,098.10 per ounce, up 0.8 percent.
"It's largely on the dollar," said Stephen Briggs, a
commodities strategist for RBS in London. "We had a very sharp
rally in the dollar last week, which worried some of the longs
in gold, but it has kind of stabilised now."
"The default position would be some softness but everything
largely depends on the dollar -- it is so often the key driver
when there isn't anything very obvious elsewhere to drive it."
The euro rose against the dollar and the yen, as an offer of
five-year Greek sovereign bonds met strong demand. [] A weak
U.S. currency makes metals priced in dollars less expensive for
holders of other currencies.
India, historically the world's top gold consumer, continued
buying, with limited quantities changing hands below the $1,100
an ounce level, dealers said. []
"They are recovering a bit," said Eugen Weinberg, an analyst
at Commerzbank. "The slump of the last week might be considered
by some bargain hunters as being an excessive one.
"Some see in gold protection going forward, if the
correction on equity markets continues ... but also there is
some physical buying at the current levels after the strong
decreases."
OBAMA PROPOSAL
On Friday, gold hit a near five-week low at $1,081.90,
bringing its losses for the week to more than 3 percent, after
U.S. President Barack Obama's proposal to limit financial
risk-taking hit the broader commodities markets.
Obama's plan to restrict banks or financial institutions
from associating with a hedge fund or a private equity fund,
unveiled on Thursday, caused stocks and commodities to tumble.
[]
"The noose certainly seems to be tightening around the gold
bulls with President Barack Obama's proposal to limit financial
risk-taking, especially by the banking sector and also due to
the growing expectations that China will continue to tighten its
monetary stance," said Pradeep Unni, senior analyst and trader
at Richcomm Global Services.
"The markets will continue to be volatile as the month ends,
but the technical damage done in Friday's session hints that we
have further downside targets in gold at the moment," he added.
There are signs that China, the world's largest gold
producer, could move to tighten monetary policy to rein in its
booming economy. []
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said its holdings stood at 1,111.922
tonnes as of Jan. 22, unchanged from the previous business day.
[]
Palladium prices rose but were some way off last week's
19-month highs of $471.75 per ounce, when the recent launch of
exchange-traded funds in the United States fuelled investment
demand.
Palladium <XPD=> climbed to $436 an ounce, versus $430.50
late in New York on Friday.
Spot platinum <XPT=> was bid at $1,544 per ounce, against
$1,546.50. It touched $1,654 last week, its highest since August
2008.
Holdings of ETF Securities' U.S.-based platinum
exchange-traded fund <PPLTiv.P> rose 10 percent on Friday, while
those of its U.S. palladium product <PALLiv.P> climbed by a
third, the company said on Monday. []
Among other precious metals, silver <XAG=> prices were at
$17.08 an ounce versus $16.96 an ounce late on Monday.
(Reporting by Michael Taylor; Editing by Anthony Barker)
