* Stock markets inch higher in Europe; Wall Street eyed
* Physical demand improves ahead of Indian festival
* Chinese platinum imports rise in March
(Updates throughout, changes dateline - pvs TOKYO)
By Jan Harvey
LONDON, April 22 (Reuters) - Gold inched higher in Europe on
Wednesday in light trade supported by interest in the metal as a
haven from risk amid uncertainty over the outlook for the wider
markets, along with firmer physical demand.
But the prospect of a higher open among Wall Street stocks
and fresh strength in the U.S. dollar, typically a key driver
for gold, are likely to limit gains, traders said.
Spot gold <XAU=> was bid at $884.50 an ounce at 0924 GMT,
against $882.25 an ounce late in New York on day.
"(Gold) is looking at equity markets for direction right
now," said Standard Bank analyst Walter de Wet. "Equities play
an important role, particularly in a week when there is no
really important macro data."
Stocks broadly weakened in Asia, helping the precious metal
tick higher, and have drifted higher after a lower open in
Europe. Volatility in stock markets helps gold, which is often
bought as a safe store of value.
World stocks steadied as a mixed set of corporate earnings
sparked caution over the state of the economy, helping the
dollar -- which is perceived as a less risky currency due to its
liquidity -- to a one-month high against the euro. []
A firmer dollar typically weighs on gold, which is often
bought as an alternative asset to the U.S. currency. But the
relationship between the two has weakened in recent months as
both take their cues from risk aversion.
Elsewhere an uptick in physical demand for the metal in Asia
ahead of the Akshaya Tritya festival on April 27 -- an
auspicious time for gold buying -- is also helping support
prices.
Lower prices have helped physical demand to recover.
"We sold around 100 kgs this morning," said a dealer with a
private bank in Mumbai. Gold imports in India have also picked
up this month after an extremely slow period at the beginning of
2009. []
SLUGGISH
Investor demand remained relatively sluggish, however.
Holdings of the SPDR Gold Trust <GLD>, the world's largest
gold-backed exchange-traded fund, were steady on Tuesday from
the previous day.
The trust's holdings have declined 19.01 tonnes in the last
four weeks, compared to a rise of 96.01 tonnes in the preceding
four weeks.
"The 21.7 tonnes in ETF outflows that were made on Thursday
and Friday... will counteract support from the predicted 30
tonnes in imports to India," said MF Global in a note.
Among other precious metals, spot platinum <XPT=> was bid at
$1,148.50 an ounce against $1,152.50, while palladium <XPD=> was
bid at $222 an ounce, unchanged from late New York trade.
Chinese imports data released on Wednesday showed China
imported 3,566 kilograms of platinum in March, up more than 35
percent from a year before. []
The figures reflect a rise in platinum jewellery buying in
China at the beginning of the year, with jewellers taking
advantage of lower prices to rebuild stocks of the metal.
"Demand for platinum jewellery is back and is the only thing
preventing platinum from falling to $500-600," said one platinum
group metals trader.
Spot silver <XAG=> was bid at $12.11 an ounce against
$11.99, tracking gains in gold.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
