* Dollar firms as caution reigns on wider markets
* Oil slides more than 4 pct to five-week low
* Indian gold, silver demand could by hurt by duty hike-BBA
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, July 6 (Reuters) - Gold slipped in Europe on Monday,
pressured by gains in the dollar as investors bought the
currency as a safe store of value amid fears over the outlook
for the global economy.
A slide in oil and other commodity prices was also keeping
bullion under pressure, analysts said.
Spot gold <XAU=> was bid at $922.90 an ounce at 0905 GMT,
against $932.30 an ounce late in New York on Friday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange fell $7.90 to $923.10 an ounce.
"The euro is a bit weaker (versus the dollar) and oil is
going down quite sharply," said Afshin Nabavi, head of trading
at MKS Finance in Geneva. "Though we haven't broken out of our
range, $920 is a very important level."
Investor confidence has been subdued since weaker than
expected jobs data from the United States last week. While gold
also often benefits from uncertainty in the wider markets, it is
currently taking its cues chiefly from the dollar. []
Bullion is often bought as an alternative asset to the U.S.
currency and moves in the opposite direction to it. Traders are
awaiting fresh direction from the outcome of the G8 meeting
later in the week. []
"It seems like gold will continue to trade in the range with
a negative tone, and rallies might still be used as fresh
selling opportunities," said Pradeep Unni, senior trader at
Richcomm Global Services.
"The market will certainly be cautious ahead of the G8,
(and) that nervousness could further limit the metal in the
range," he added. "It's ideal to be on the selling side, and the
slide in oil prices may keep the prices subdued."
PROSPECTS
Oil slipped more than 4 percent to a five-week low above $64
a barrel on Monday, pressured by doubts over the prospects for
an economic recovery and the stronger dollar. []
Other industrial commodities such as copper and aluminium
also posted losses. []
Elsewhere, the Bombay Bullion Association said demand for
gold and silver from India, the world's biggest bullion
consumer, is likely to be pressured further this year by an
increase in import duty in the budget for 2009/10.
"As it is business was bad," said the association's head
Suresh Hundia. "This will make it worse." Indian gold imports
tailed off last year as prices rose. []
Bargain hunters emerged in India as prices fell on Monday,
but other Asian buyers are awaiting a further price correction,
dealers said. []
Among other precious metals, silver <XAG=> was at $13.12 an
ounce against $13.39, tracking gold lower.
"Interestingly, the gold to silver ratio surged higher in
the past week, pushing above 69 on Friday," said VTB Capital
analyst Andrey Kryuchenkov in a note.
"Gold prices were almost unchanged in volatile trading last
week. However, silver suffered not only from weakness on the
(platinum) market, but also from a slight increase in risk
aversion and resurfacing economic concerns."
Elsewhere platinum <XPT=> was at $1,154.50 an ounce against
$1,185, while palladium <XPD=> was at $241 against $248.50.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
