* Gold posts modest gains in quiet trade
* The dollar drop versus euro helps, oil fall caps rise
* Holiday thinned markets keep volumes light
(Recasts, updates prices, market activity to New York close;
adds second byline, dateline, previously LONDON)
By Carole Vaporean and Humeyra Pamuk
NEW YORK/LONDON, Dec 22 (Reuters) - Gold climbed around 1
percent in thin trade on Monday as the dollar lost ground
against the euro, but tumbling oil prices capped the gains,
traders and analysts said.
Spot gold <XAU=> was fetching $845.90 an ounce at 4:02 p.m.
EST (2102 GMT) versus $837.60 an ounce late in New York on
Friday, when it dropped nearly 3 percent.
On the COMEX division of the New York Mercantile Exchange,
February <GCG9> finished $9.80, or 1.17 percent, higher at
$847.20 an ounce. The contract set an inside range between
$836.70 and $853.0 an ounce.
"The dollar's definitely helping gold," said analyst Eugen
Weinberg at Commerzbank in Germany.
The euro added 0.5 percent to $1.3994 <EUR=> after earlier
hitting a session peak of $1.4123 in holiday-thinned trade.
"Gold is following the dollar at the moment. And the
dollar's holding fairly steady against the euro. So you're
going to see gold holding steady," said one New York dealer.
Trading volume was light, traders said, with many market
players leaving for the Christmas holiday.
"We're going to see some volatility as people exit their
positions. In all these markets you see big drops or big climbs
from out of nowhere. It could just be people wanting to go flat
so they can enjoy their vacations," a New York dealer said.
Dollar-denominated bullion, which touched a two-month high
of $881.20 an ounce last week, tends to move opposite the
dollar. A weaker U.S. currency makes gold cheaper for overseas
investors.
Switzerland's Zurich Cantonal Bank (ZKB) said gold
investment in its exchange-traded fund rose to 3.128 million
ounces in the week ending Dec. 19, compared to 3.082 million
ounces in the previous week.
UNDER PRESSURE
More gloomy news on the global economy is expected this
week -- with revised U.S. third-quarter GDP on Tuesday and
November U.S. personal spending on Wednesday -- pointing to a
long recession ahead.
Spot platinum <XPT=> was at $845.00 an ounce versus $847.00
an ounce, and spot palladium was slightly lower at $171.0 an
ounce from $173.00. Silver climbed to $10.80 an ounce from
$10.81.
Russia, a major supplier of platinum group metals (PGMs)
used in industries ranging from car-making to jewellery, may
face delays in exports next year due to red tape, the former
monopoly export agency said.[]
(Additional reporting by Humeyra Pamuk in London)
