* Dollar lifts from lows vs euro ahead of ECB
* U.S. non-farm payrolls also in focus
* SPDR ETF dips; ETFS silver, palladium assets hit records
(Releads, updates prices)
By Jan Harvey
LONDON, June 4 (Reuters) - Gold edged off highs in Europe on
Thursday as the dollar recovered some earlier losses against the
euro, with traders taking to the sidelines ahead of an interest
rate decision from the European Central Bank later in the day.
The market is also looking ahead to key U.S. non-farm
payrolls data on Friday for its impact on the currency markets.
Spot gold <XAU=> was bid at $964.70 an ounce at 1029 GMT,
against $962.15 an ounce late in New York on Wednesday. Earlier
it touched a session high of $970.45.
"Charts are showing marginal recovery and all gold's forward
movements will definitely depend upon the euro-dollar direction
in the immediate term," said Pradeep Unni, senior analyst at
Richcomm Global Services.
"If the dollar turns stronger after the rate decision --
though interest rates could be kept unchanged -- gold could be
dragged lower beyond key supports."
The dollar edged off lows after weakening against the euro
in earlier trade as remarks by Federal Reserve Chairman Ben
Bernanke on fiscal deficits the previous day prompted selling of
the U.S. currency. []
Any new dollar weakness could prompt more buying of gold as
an alternative asset, and will make dollar-priced commodities
cheaper for holders of other currencies.
"We would expect gold's inverse correlation to the dollar to
remain strong, while its correlation to the stock markets will
start weakening from now on," VTB Capital said in a note.
World equities rose close to 2009 highs on Thursday, while
European shares climbed ahead of the BoE and ECB decisions. The
ECB is seen keeping interest rates at record lows to help revive
the euro zone economy, analysts said. [] [].
NON-FARM PAYROLLS
The May U.S. payrolls report due on Friday is also being
closely watched. "If this comes in lower than expectations, I
expect we will see some downward pressure on gold," said David
Wilson, a metals analyst at Societe Generale.
On the investment side, holdings of the world's largest
gold-backed exchange-traded fund, New York's SPDR Gold Trust,
posted a small 1.5-tonne fall on Wednesday. []
The three gold-backed ETFs operated by London's ETF
Securities added 36,655 ounces of bullion to their reserves that
session. But gold demand from India, the world's biggest bullion
consumer, was sluggish as prices stayed high. []
Elsewhere, silver <XAG=> was $15.16 an ounce against $15.30,
tracking moves in the gold market.
Platinum <XPT=> was bid at $1,244 an ounce versus $1,233.50,
while palladium <XPD=> was $244 against $240.50, both benefiting
from fund buying. ETF Securities said its silver and palladium
ETFs both hit record levels on Wednesday. []
Platinum refiner Johnson Matthey warned its profits and
sales would fall over the coming months as the world car
industry continues to struggle. []
Goldman Sachs, however, said U.S. auto sales are likely to
improve in the second half of 2009. []
(Editing by Sue Thomas)
