* Stock markets decline in Asia, Europe, oil slips
* Traders eye ECB rate announcement for impact on currencies
(Recasts; adds comment; changes dateline pvs SINGAPORE)
By Jan Harvey
LONDON, Nov 6 (Reuters) - Gold held just over $740 an ounce
in Europe on Thursday, as interest in the metal as a haven from
risk balanced the firmer dollar and falling oil prices.
Traders are awaiting the European Central Bank's expected
rate cut later in the day for clues as to the next move in the
foreign exchange markets and, consequently, in gold.
Spot gold <XAU=> was quoted at $740.35/742.35 at 0956 GMT,
little changed from $739.45 an ounce late in New York on
Wednesday.
"Gold is considered to be a safe haven," said Commerzbank
analyst Eugen Weinberg. "Right now the markets are again on the
downside worldwide. The Dow Jones and S&P were down 5 percent
yesterday, and the Asian markets were also sharply down."
"There is probably some outflow out of shares into the gold
market."
European stocks fell in early trade on Thursday, tracking
losses in Asia and as oil extended losses to below $65 a barrel,
with weak U.S. data intensifying fears over the prospect of a
global recession. []
Shares bounced on Wednesday after the victory of Democrat
Barack Obama in the U.S. presidential election, but gains were
short-lived after data showed cuts in private employment and a
sharp contraction in the services sector.
Traders were awaiting the ECB rate announcement -- likely to
be a cut of at least 50 basis points -- and U.S. non-farm
payrolls data, due on Friday, for clues to the next direction of
trade.
Both announcements are likely to have a significant effect
on the currency markets, which will impact gold. The precious
metal is often bought as a hedge against weakness in the U.S.
dollar, and typically moves in the opposite direction to it.
The Bank of England is also expected to cut rates by half a
percentage point later in the day.
"Markets will keenly await the expected 50 basis point cut
by the ECB and the Bank of England," said Standard Bank analyst
Walter de Wet. "This could restore some confidence and support
equities in Europe and the UK (and) might also lead to further
euro weakness against the dollar."
"However, despite the rate cuts many participants may remain
sidelined until tomorrow's U.S. non-farm payroll data is
released."
The dollar was a touch firmer against the euro on Thursday
as traders anticipated rate cuts. []
SILVER DEMAND FIRM
Among other precious metals, silver <XAG=> was little
changed at $10.39/10.49 an ounce against $10.37.
While prices remain closely correlated to the dollar,
physical demand for silver remains firm, with holdings of the
world's largest silver-backed exchange traded fund, the iShares
Silver Trust, still only 2 percent down from all-time highs.
"Based on our conversations with merchants and on what we
believe to be increased physical flows, Indian silver bullion
imports for October will likely be higher than the 300 tonnes
achieved in September," said HSBC analyst James Steel in a note.
"Other parts of the emerging world are also active buyers,
and we note strong retail demand for silver coins, as
reported by North American coin dealers."
Platinum steadied after tumbling more than 4 percent in Asia
as investors took profits after Thursday's hefty rise.
The white metal climbed 5 percent last session after the
world's largest producer Anglo Platinum <AMSJ.J> said it was
temporarily shutting its Polokwane smelter in South Africa.
Spot platinum <XPT=> was quoted at $855/875 against $862 an
ounce late in New York on Wednesday, having earlier touched a
low of $824.50. Its sister metal palladium <XPD=> was at
$218/233 against $216.
(Reporting by Jan Harvey; editing by Karen Foster)
