* Dollar pares losses ahead of bond auction, U.S. data
* Oil up, benchmark commodities index closed at 7-month high
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By Jan Harvey and Kylie MacLellan
LONDON, June 11 (Reuters) - Gold edged lower in Europe on
Thursday, creeping below $950 an ounce, with the dollar paring
losses against the euro as the currency awaited fresh direction
from another U.S. government debt auction later in the session.
Spot gold <XAU=> was bid at $949.90 an ounce at 1116 GMT,
against $953.65 an ounce late in New York on Wednesday. The
metal has remained in a relatively narrow range this session.
"Gold is waiting really to see what the next significant
move in the dollar will be," said Standard Chartered analyst
Daniel Smith.
"We've seen a fairly significant weakening over the last
month or two and then a pull-back from that, so I think we're
waiting for it to break more convincingly in one direction or
another."
The dollar edged down against a basket of currencies on
Thursday, as rising U.S bond yields raised concerns about
burgeoning U.S. debt and speculation big emerging countries may
move out of U.S. dollar assets. []
Foreign exchange traders awaited direction from an auction
of 30-year Treasury bonds later in the session, which may lead
to a fresh rise is U.S. yields. On Wednesday the benchmark U.S.
Treasury yield hit an eight-month high.
Oil firmed, holding close to a near-eight month high above
$72 a barrel hit in earlier trade. Rising crude prices can boost
buying of gold as an inflation hedge. []
Stronger crude prices also indicate interest in commodities
as an asset class. A global commodities benchmark, the Reuters/
CRB index <.CRB>, closed at a seven-month high on Wednesday.
European stocks edged higher and U.S. stock futures pointed
to a slightly firmer start on Wall Street as investors eyed U.S.
weekly jobless claims and retail sales numbers due at 1230 GMT
for signs the world's largest economy is on the mend. []
SOFT DEMAND
Buying by exchange-traded funds was relatively soft, with
neither the largest gold ETF, the SPDR Gold Trust, or London's
ETF Securities reporting inflows on Wednesday. []
Gold buying in the world's largest bullion consumer, India,
remained slow on Thursday, with dealers unwilling to make fresh
purchases as the wedding season nears its end. []
On the supply side, mine output from South Africa fell 13
percent in volume terms in April from a year before, official
data showed. []
Silver <XAG=> dipped to $15.07 an ounce, platinum <XPT=> was
at $1,263 an ounce against $1,261, and palladium <XPD=> was at
$256.50 against $253.
ETF buying of platinum continued, with ETF Securities
reporting another small inflow of just over 3,000 ounces on
Wednesday. Holdings of the company's ETFS Physical Platinum fund
have risen 42,700 ounces or 14 percent in the last week.
While ETF demand is likely to support the market, price
gains could be limited by the chilling effect of this on
jewellery buying, one of the only buoyant areas of consumption
at a time when industrial demand for the metal is languishing.
"Further platinum price gains could dampen Chinese jewellery
demand, which could increase the downside risks, as China is the
biggest platinum consumer," Standard Bank said in a note.
(Editing by William Hardy)
