* Jewellery buying bounces back after price fall
* Platinum, palladium lower on sluggish demand outlook
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 20 (Reuters) - Gold steadied in Europe on
Wednesday as strong demand for physical stocks of the precious
metal supported prices after a recent dip.
The metal climbed to a one-week high in Asia, pulling other
precious metals in its wake, but softened a touch in Europe as
the dollar firmed against the euro and oil prices slipped from
highs.
Gold <XAU=> was at $810.10/811.10 an ounce at 0908 GMT
against $810.70/811.90 an ounce late in New York on Tuesday,
well above the nine-month low it touched on Friday.
"We have seen really heavy demand over the last two weeks on
the physical side," said Commerzbank senior trader Michael
Kempinski. "The bounce-back is on the back of this high physical
demand."
Demand for certain finished products is so high that
refiners are struggling to keep up, analysts say.
India, the world's largest gold market, is also likely to
step up purchases ahead of a series of key religious festivals
that culminate in October with Diwali, the Hindu festival of
lights.
A slightly firmer tone to the dollar, which is regaining
some ground against the euro on Wednesday morning after the
previous session's fall, and steadier oil prices are weighing on
gold.
Oil extended gains to $115 a barrel in early trade as the
softer dollar rekindled buying interest in oil and other
commodities, but have since slipped back to trade little changed
from Monday's level. []
Traders are eyeing U.S. weekly oil stockpile data due out at
1435 GMT for clues as to the future direction of the crude
market, and consequently of gold.
"The consensus is for a build of crude oil inventories but a
strong draw of gasoline stockpiles, which already had an impact
on oil prices yesterday," said Dresdner Kleinwort consultant
Peter Fertig.
"(If) the draw in gasoline inventories remains far below
forecasts, crude oil might head towards the $110 a barrel mark,
which would be bearish for gold," he added.
ETF HOLDINGS DIP
The SPDR Gold Trust <GLD>, the world's largest
bullion-backed exchange-traded fund, said it recorded its first
outflow in two weeks on Aug. 19, as its gold holdings dipped 1
percent. []
ETFs issue securities backed by physical commodities, and
buying by the funds has represented a major source of demand in
recent years. Analysts fear a sell-off of ETFs' gold holdings
could knock spot prices lower.
Among other precious metals, spot silver <XAG=> was little
changed at $13.15/13.20 from $13.15/13.21 in late New York trade
on Tuesday.
Spot platinum <XPT=> dipped to $1,339.00/1,359.00 an ounce
from $1,344.50/1,364.50 an ounce late in New York, having fallen
to its weakest since last September of $1,296.50 on Tuesday.
Interest in the metal remains muted by the murky outlook for
carmakers, who consume over half of the world's platinum each
year. "The metal should remain under pressure in the medium
term," said Standard Bank analyst Manqoba Madinane.
Spot palladium <XPD=> gained to $282.00/288.00 an ounce from
$280.00/288.00 an ounce.
(Reporting by Jan Harvey; editing by Christopher Johnson)
