* Dollar turns lower versus currency basket, dips 0.1 pct
* Pressure grows on Portugal to seek EU, IMF help
* Main gold, silver ETFs saw outflows on Friday
(Updates prices)
By Jan Harvey
LONDON, Jan 10 (Reuters) - Gold rose above $1,370 an ounce
on Monday as the dollar moved into negative territory versus the
euro, and as concerns over the outlook for Portugal's sovereign
debt lifted the metal's appeal as a haven from risk.
Spot gold <XAU=> was bid at $1,370.75 an ounce at 1635 GMT,
against $1,368.80 late in New York on Friday. U.S. gold futures
for February delivery <GCG1> rose $1.90 an ounce to $1,370.80.
Prices last week posted their biggest one-week fall since
May 2010 after a run of better-than-expected U.S. data lifted
expectations that monetary policy could tighten sooner rather
than later.
The return of concerns over the euro zone has tempered that
dip, though risks remain.
"Overall positive U.S. economic data last week reduces the
likelihood of further quantitative easing, thus weighing on
gold's safe haven and inflation hedge appeal," said BNP Paribas
analyst Anne-Laure Tremblay.
"Higher bond yields are also raising the opportunity cost
for holding gold. Beyond this short term correction, we continue
to hold a positive view of the gold price for the balance of
2011," she added. "Sovereign risk will remain a key theme for
gold in 2011."
A senior euro zone source said on Sunday pressure is growing
on Portugal from Germany, France and other euro zone countries
to seek financial help from the European Union and International
Monetary Fund to stop the bloc's debt crisis from spreading.
[]
The euro reached a four-month low against the dollar <EUR=>,
although it later recovered to trade 0.2 percent higher. []
A stronger dollar typically pressures gold, because it makes
the metal more expensive for holders of other currencies and
reduces its appeal as an alternative asset.
When risk aversion grows in the euro zone, it can lift the
appeal of both the dollar and gold. Last year the usual negative
correlation between gold and the dollar weakened at times when
the euro zone crisis flared up, notably in the second quarter.
INDIAN BUYERS ATTRACTED
Buying in India, the world's biggest gold consumer, rose on
Monday after last week's price fall attracted buyers back to the
market, and traders stocked up ahead of the upcoming harvest
festival and on wedding demand, dealers said. []
But interest in gold-backed exchange-traded funds continued
to be lacklustre, with holdings of the largest, New York's SPDR
Gold Trust <GLD>, dropping by a further 1.5 tonnes on Friday.
[]
Societe Generale said in a weekly note that buying by
exchange-traded funds had been markedly slower as prices rose
above $1,400 an ounce.
"This, of course, does not necessarily mean that investor
appetite has become sated," it said. "ETF purchases, as noted
above, were eclipsed by the very strong demand in (over the
counter) products, and there are clear indications that this
demand will remain strong this year."
"This will be driven by Chinese buying at the retail level
in particular," it added.
Holdings of the largest silver ETF, the iShares Silver Trust
<SLV>, also fell more than 53 tonnes on Friday. Spot silver
<XAG=> was at $28.98 an ounce against $28.69. []
Platinum <XPT=> was at $1,744.50 an ounce against $1,731,
while palladium <XPD=> was at $751.72 against $748.50.
(Editing by James Jukwey)
