* Dollar seen sticking to tight range ahead of Fed
* Oil ticks higher, other commodities steady
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By Jan Harvey
LONDON, June 19 (Reuters) - Gold edged up in Europe on
Friday, as the dollar index slipped into negative territory, but
trading was muted as the U.S. currency remained hemmed into
ranges ahead of a key Federal Reserve meeting next week.
Spot gold <XAU=> was bid at $934.05 an ounce at 1051 GMT,
against $932.35 an ounce late in New York on Thursday. Prices
were awaiting new direction from the currency markets, currently
the main driver of gold.
"If you are looking at the ups and downs of gold in its
narrow trading range, it is more or less a reflection of the
swings in the euro/dollar exchange rate," said Peter Fertig, a
consultant at Quantitative Commodity Research in Germany.
The dollar index turned negative in early European trade and
remained under pressure as brighter economic data fuelled
expectations for growth. []
Moves in the currency remained limited, however, ahead of a
two-day Fed policy meeting next week. As long as the currency
markets remain rangebound, gold will also be hemmed in.
Factors such as jewellery buying, safe-haven demand and
inflation hedging are all likely to remain subservient to the
influence of currencies, analysts said.
"Inflation expectations are not there just yet, and the
precious metal could see even more losses if equities bounce
back up," VTB Capital said in a note.
"Gold's attractiveness as a safe haven asset is virtually
zero at the moment, which is evident from the unchanged
speculative positions in gold futures or ETFs (exchange-traded
funds)," it added.
STRONG SESSION
On other markets, European stocks extended gains in the late
morning after a strong session in Asia. []
Oil prices firmed a touch after bullish economic data helped
the outlook for demand, and amid geopolitical concerns over key
oil producers Nigeria and Iran. Strength in crude can support
gold, as it boosts its appeal as an inflation hedge. []
Holdings of the major gold exchange-traded funds were
stable, as investors awaited clues from the wider markets.
Another wave of bad news on the economy could unleash new
inflows, however, analysts said. []
In supply news, Gold Fields <GFIJ.J>, the world's number
four gold producer, said its new Peruvian mine Cerro Corona
should produce some 350,000 equivalent ounces of gold in 2009
and 2010. []
Elsewhere, Swiss-based commodities trader Glencore
International was reported to be considering a stock market
listing. []
Silver <XAG=> was at $14.26 an ounce against $14.19.
Platinum <XPT=> was at $1,211 an ounce against $1,200, and
palladium <XPD=> at $241 against $238.
ETF Securities said holdings of its ETFS Physical Palladium
fund <PHPD.L> rose to a record on Thursday, up just over 3,000
ounces or 1 percent to 315,572 ounces. The fund's reserves are
up 10,000 ounces or 3.3 percent week-on-week. []
(Editing by Anthony Barker)
