* Gold caught in commods selling as caution batters markets
* Dollar surrenders gains vs euro as EU leaders reassure
* Platinum, silver, palladium all slide in gold's wake
(Updates prices, adds comment)
By Jan Harvey
LONDON, Nov 12 (Reuters) - Gold prices stayed under pressure
on Friday, drawing scant benefit from a slide in the dollar, as
talk of an EU rescue package to tackle Ireland's debt woes
removed some safe-haven demand from the market.
Spot gold <XAU=> was bid at $1,392.24 an ounce at 1433 GMT
against $1,409.39 late in New York on Thursday, off a session
low of $1,378.00 an ounce. U.S. gold futures for December
delivery <GCZ0> fell $10.10 an ounce to $1,393.20.
Prices slipped sharply in earlier trade as concerns that
Ireland would, like Greece, need a bailout knocked the euro, and
as it was caught up in selling of assets seen as higher risk
amid talk of a Chinese rate hike.
The precious metals lifted from lows as the dollar slipped
lower, but has failed to make much headway after EU leaders
sought to reassure bondholders over the value of their assets.
A statement from France, Germany, Italy, Spain and Britain
issued at the Group of 20 summit in Seoul, said bondholders
would not be forced to write down the value of their bond
holdings in the event of a new euro zone bailout.[]
The euro rose from a six-week low against the dollar after
European leaders sought to reassure investors. []
"Despite the recovery in the euro and the weakness in the
dollar index, gold remains under pressure, because there is no
longer a reason to hold gold as protection against a default by
Ireland," said Peter Fertig, a consultant at Quantitative
Commodity Research.
"The ten-year Bund future has dropped more than a full point
since then opening this morning, and that has been the
safe-haven trade. We have also seen that after this announcement
stock markets recovered, reversing losses, in Europe."
YIELDS EASE
Irish government bond yields fell on Friday after EU leaders
reiterated that holders of outstanding bonds would not be forced
to take losses in any debt restructuring. Bondholders remain
nervous, however. []
Meanwhile major European stock markets were lower after a
weak session in Asia which notably saw the Shanghai composite
index <> fall 5 percent, its biggest one-day drop since
May, on talk of another Chinese interest rate hike. []
Wall Street was on course to end a five-week winning streak,
led lower by natural resource shares as expectations of a China
interest rate hike hit commodity prices. []
G20 leaders drew a veil over their economic policy disputes
on Friday, agreeing to tackle tensions that have raised the
spectre of currency wars and giving the nod to countries that
have seen huge capital inflows to impose controls.
[]
On the physical side of the market, Indian gold traders
hunted for bargains after prices retreated from record highs,
stocking up for weddings in the world's biggest bullion
consumer. []
Interest in investment vehicles like exchange-traded funds
was soft, however, with holdings of the world's largest
gold-backed ETF, New York's SPDR Gold Trust <GLD>, falling by
just under 1 tonne on Thursday. []
Oil meanwhile tumbled 1.6 percent and base metals fell as
commodities came under pressure from investor caution and
speculation that China could be headed for another rate hike.
Among other precious metals, spot silver <XAG=> was bid at
$27.24 an ounce against $27.75, while platinum <XPT=> was at
$1,710.74 an ounce against $1,752 and palladium <XPD=> was at
$699.72 against $709.72.
(Reporting by Jan Harvey; editing by Keiron Henderson)
