(Recasts with comment, prices, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, June 13 (Reuters) - Gold weakened in Europe on
Friday after the euro slipped to a one-month low against the
dollar in the wake of an Irish vote on EU reform.
Gold <XAU=> dipped to $863.10/864.10 an ounce at 0947 GMT,
from $867.55/869.55 late in New York on Thursday.
Precious metals traders are now awaiting U.S. CPI data due
later on Friday, strength in which could increase the likelihood
of a hike in interest rates later this year and further benefit
the dollar.
They will also be closely watching this weekend's G8 finance
ministers' meeting, at which inflation is expected to take
centre stage.
"This is the end of a pretty choppy week. People will be
keeping an eye on the dollar as the key driver of intraday
direction," said James Moore, an analyst at TheBullionDesk.com.
"They will also be watching inflation data, after the
comments we have had from the ECB and the Fed."
The euro weakened on Friday against the dollar after reports
Ireland had returned a 'no' vote in the EU reform referendum.
[]
Strength in the dollar tends to pressure gold, which is
often bought as a hedge against weakness in the U.S. currency.
FLUCTUATIONS
The U.S. currency has been climbing over the last week as
officials voice growing concerns over rising prices, fuelling
expectations of a rate hike from the U.S. Federal Reserve.
However, comments from the European Central Bank are also
being interpreted as indicative of a possible rise in euro zone
rates, boosting the euro.
Volatility in the currency markets has led gold prices to
see-saw this week, albeit within a relatively narrow range.
Gold reached a two-week high of $908.70 on Monday, but
slipped to $856.80 on Thursday, its weakest level since May 2.
Inflation is expected to be the central focus of this
weekend's meeting of G8 ministers in Osaka, Japan.
Markets will be watching for any further dollar-supportive
comments from U.S. Treasury Secretary Henry Paulson, which could
pressure gold. []
More immediately, gold traders will be looking to U.S.
consumer inflation data due out at 1230 GMT.
"Combined with the better-than-expected retail sales, high
inflation could improve the probability of a US interest rate
hike," said Standard Bank analyst Manqoba Madinane in a note.
The oil market will also be in focus, although crude prices
have also steadied after a volatile session on Thursday.
[]
Gold tends to move in line with crude, as it is bought as a
hedge against oil-led inflation.
The market shrugged off news that the Tokyo Stock Exchange
would list a gold exchange traded fund -- backed by physical
bullion -- on June 30. []
Spot platinum <XPT=> rose to $2,019.50/2,039.50 an ounce
from $2,010.50/2,030.50 late in New York.
"With no significant fundamental news from South Africa, the
dollar should continue to dictate price movements," said
Madinane at Standard Bank.
Silver <XAG=> was steady at $16.37/16.43 an ounce against
$16.44/16.54, while spot palladium <XPD=> was little changed at
$434.00/442.00 an ounce against $433.50/441.50.
(Reporting by Jan Harvey; editing by Christopher Johnson)
