* Gold bounces, supported by softer dollar
* Investors hunt bargains after Wednesday's five-week low
* Oil holds gains after previous session's uptick
(Recasts, updates throughout, PVS SINGAPORE)
By Jan Harvey
LONDON, July 31 (Reuters) - Gold bounced in Europe on
Thursday as investors, encouraged by a slight softening of the
dollar and a firmer tone to oil, hunted bargains after the metal
hit a five-week low in the previous session.
Traders are awaiting key U.S. data, including U.S.
preliminary GDP figures due out later on Thursday and payrolls
numbers on Friday, that are expected to set fresh direction to
trade.
Gold <XAU=> climbed to $912.70/913.70 an ounce at 0950 GMT
from $907.20/908.40 an ounce late in New York on Wednesday. The
precious metal dropped as low as $893.50 an ounce in the last
session, its weakest since June 26, as the dollar rose.
"The dollar is slightly weaker compared to yesterday and the
oil price is higher, (which) explains gold's move back above the
$900 level," said Calyon metals analyst Robin Bhar.
The dollar weakened a touch against the euro on Thursday,
retreating after it climbed on above-consensus ADP jobs data on
Wednesday. []
The greenback's dip supported a wave of bargain hunting as
investors took advantage of Wednesday's more than 1 percent
slide in gold prices. A softer dollar tends to benefit gold, as
it encourages buying of the precious metal as a currency hedge.
Oil prices are also supporting buying on Thursday, as crude
largely held the nearly $5 gains it posted in the previous
session. Gold is often bought as a hedge against oil-led
inflation. []
"Gold will take its cue from what happens to currencies and
the oil price," Bhar at Calyon added. "Today and tomorrow, we
get some fairly key US data."
This session will see the release of first estimate U.S. GDP
data for the second quarter, which is expected to show a 2.0
percent annualised growth rate, compared to 1.0 percent in the
first quarter.
Chicago purchasing managers' index data are also due at 1345
GMT, while Treasury Secretary Henry Paulson is due to speak on
markets and the economy at 1700 GMT. All could affect the
dollar, and consequently gold.
PGMs RECOVER
Platinum and palladium, both largely used by carmakers as a
component in autocatalysts, ticked up on Thursday, having
slipped in gold's wake in the previous session.
Spot platinum <XPT=> rose to $1,750.00/1,770.00 an ounce from
$1,725.00/1,745.00 late in New York on Wednesday.
"Concerns of slowing growth in the US and western Europe
continue to dampen platinum's sentiment," said James Moore, an
analyst at TheBullionDesk.com.
"However, with many auto-makers reporting strong sales in
the BRIC nations, metal loadings are likely to increase in the
coming year due to tighter emissions," he added.
"With the metal to see a substantial supply deficit this
year we anticipate further price weakness will be limited."
Spot palladium <XPD=> rose to $375.50/383.50 an ounce from
$371.50/379.50 late in New York. Silver <XAG=> edged up to
$17.52/17.57 an ounce from $17.50/17.56.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
