* Dollar edges off earlier highs, supporting gold
* Strike threat at Impala Platinum in South Africa
(Updates throughout, previous TOKYO)
By Jan Harvey
LONDON, Aug 20 (Reuters) - Gold held near $945 an ounce in
Europe on Thursday, up a touch from the previous session as the
dollar's retreat from early highs against a basket of currencies
boosted interest in the metal as an alternative asset.
Spot gold <XAU=> was bid at $943.90 an ounce at 0842 GMT,
against $941.55 an ounce late in New York on Wednesday. U.S.
gold futures for December delivery <GCZ9> on the COMEX division
of the New York Mercantile Exchange rose $1 to $945.80 an ounce.
"The lower U.S. dollar and higher stocks took the market by
surprise yesterday," said Afshin Nabavi, head of trading at MKS
Finance. "(Gold) held the $933 level and flew up above $940."
"At the moment, it looks like we will continue trading the
range between $930-960," he added. "A confirmed breach of $945
should take us up towards $959, the previous high, provided the
weakness in the dollar continues."
The dollar index <.DXY> edged higher early on Thursday,
capping gains in the precious metal, though it has since eased
back to trade flat from the previous session. []
Traders are awaiting direction from weekly U.S. jobless
claims and the Philadelphia Federal Reserve's business activity
index, which will give clues on the state of the U.S. economy
later in the session.
On the wider markets, European stocks rose after Chinese
shares surged more than 4 percent following a two-week sell-off,
but some investors worried the Shanghai slide had more room to
run. [] []
Oil prices crept higher, extending the previous session's $2
a barrel gains, as data showing a steep drop in U.S. crude
stockpiles and imports supported prices. Gold often tracks crude
prices, as the metal can be bought as an inflation hedge. []
JITTERY
Investors remain jittery about demand after a report from
the industry-funded World Gold Council on Wednesday showed a 9
percent drop in second-quarter demand, largely on a fall in
jewellery buying.
Holdings of the largest gold exchange-traded fund, the SPDR
Gold Trust <GLD>, were unchanged for a sixth straight session on
Wednesday, the trust said on its website. []
Among other precious metals, silver rose more than 1 percent
as base metals rallied on the back of rising Chinese equities,
helping lift the grey metal, which is used in industries such as
electronics manufacturing as well as being an investment asset.
Silver's correlation with copper has increased over the last
week to 0.92 -- with 1 demonstrating a perfect correlation --
from 0.61 the previous week, according to Reuters data.
Spot silver <XAG=> was at $14.02 an ounce against $13.79.
Elsewhere platinum <XPT=> was at $1,249 an ounce against
$1,234.50, while palladium <XPD=> was at $273 against $270.
The main South African miners' union said late on Wednesday
it will start an indefinite strike next week at Impala Platinum,
the world's second largest platinum producer. South Africa
produces four out of five ounces of the metal. []
Implats said it hopes to hold further talks with the union
to prevent the strike. []
"Platinum for the moment should find further support around
the $1,220 level, with scaled-up resistance expected towards the
June $1,297 high," said TheBullionDesk.com analyst James Moore.
"Palladium appears comfortable above the $264 level although
the scale of recently added longs does leave the metal
vulnerable to a deeper correction," he added.
(Editing by James Jukwey)
