* Gold slides as dollar firms, oil retreats
* Platinum, palladium slip on demand fears
* Turkey's H1 gold imports dip 27.5 pct
(Updates prices, adds comment)
By Jan Harvey
LONDON, July 7 (Reuters) - Gold slipped on Monday alongside
oil prices as the dollar firmed to a one-week high after jobs
data last week showed the U.S. economy may not be as weak as
previously thought.
A recovery in the equity markets is also denting gold's
appeal as an alternative investment to shares, analysts said.
Gold <XAU=> fell to $915.90/916.90 an ounce at 1527 GMT from
$932.00/933.00 an ounce in London on Friday, when U.S. markets
were closed for Independence Day holiday.
Earlier it touched a session low of $914.50 an ounce, nearly
2 percent below the level it traded at on Friday.
"The euro is a bit weaker, the dollar is stronger and oil is
slipping a bit," said Commerzbank analyst Eugen Weinberg.
"There has been a strong negative correlation between the
gold price and the equity markets. Risk aversion has led to an
inflow into gold, so higher equity markets could see a lower
gold price."
The dollar is drawing support from last week's jobs report,
which was less bleak than had been expected, and a slide in oil
prices. []
A firmer dollar typically pressures gold, which is bought as
an alternative investment to the U.S. currency. A stronger
greenback also makes dollar-priced commodities such as precious
metals more expensive for holders of other currencies.
OIL SLIPS
Lower oil prices also added to downward pressure on gold,
which is often bought as a hedge against oil-led inflation.
Crude fell, but losses were limited by concerns about the
ongoing dispute between Iran. []
However, in the longer run near-record crude prices are seen
as a major supportive factor for the precious metal.
"Oil prices at these levels should anchor precious metal
investment demand as investors seek portfolio protection against
rising global inflation expectations," said Standard Bank
analyst Manqoba Madinane in a note.
In fundamental news, London-based ETF Securities said the
amount of gold it holds to back its Physical Gold
exchange-traded fund has risen 15 percent in the last week to a
record 1.459 million ounces.
The rise reflected gains across its physically backed
precious metals ETFs, with its platinum and palladium holdings
also rising to new records and silver ticking up 1 percent.
[]
However, jewellery buying remains lacklustre as prices
remain high and volatile, analysts said.
Turkey's gold imports were down 27.5 percent year-on-year in
the first half of 2008. The country was the fifth largest gold
jewellery buying area last year, according to the World Gold
Council. []
Platinum group metals prices are also sliding, with platinum
shedding 1.5 percent to a one-month low and palladium just under
1 percent weaker, as investors took profits after the metals'
recent gains, amid fears demand may slacken.
Platinum is chiefly used to make autocatalysts. Investors
fear that falling car sales as the U.S. ecoonomy falters could
hit PGM consumption hard.
Spot platinum <XPT=> was trading at $1,963.00/1,983.00, its
weakest level since June 5, down from $1,999.00/2,019.00 in
London on Friday.
Platinum has lost 13 percent in value since hitting a record
of $2,290 in March. The metal, also used in jewellery, had
rallied after a power crisis in main producer South Africa
disrupted mining and sparked fears of a supply deficit.
Spot palladium <XPD=> slipped to $442.50/450.50 an ounce
from $450.00/455.00 an ounce, while silver <XAG=> dropped to
$17.57/17.62 an ounce from $18.02/18.12 late in London -- well
below an 11-week high of $18.46 hit last week.
(Reporting by Jan Harvey; Editing by Pratima Desai)
