* Gold recovers after falling to lowest level since December
* Dollar slips from six-month highs vs basket of currencies
* Oil edges higher, boosting interest in gold
(Recasts, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 13 (Reuters) - Gold recovered in Europe on
Wednesday as the dollar's retreat from six-month highs boosted
the precious metal's appeal as an alternative investment and as
oil ticked up.
Traders awaited U.S. oil inventory numbers due out later in
the session and key economic data due later this week for clues
as to the future direction of trade.
Gold <XAU=> rose to $920.20/921.20 an ounce at 0901 GMT from
$814.50/815.50 an ounce late in New York on Tuesday, having
earlier touched a session high of $825.80.
On Tuesday, it tumbled to $801.90 ounce, its lowest level
since late December, largely on a surge in the dollar.
"We are more than a cent off (the dollar's) lows which of
course would see the gold price higher," said Standard Bank
analyst Walter de Wet.
"We have seen such a fast sell-off in gold that a bit of
consolidation is highly likely, especially in light of data
releases due in the rest of the week," he added.
Retail sales and industrial production data from the United
States and European inflation data are all due this week, and
are likely to affect the currency markets, a key driver of gold.
The precious metal tends to trade in the opposite direction
to the dollar, as it is often bought as a hedge against weakness
in the U.S. currency.
The dollar has retreated from six-month highs against a
basket of currencies on Wednesday, easing downward pressure on
gold and helping it bounce in line with oil. []
Crude prices ticked up on Wednesday after slipping to
three-month lows on fears over falling demand, boosting interest
in commodities as an asset class and gold's appeal as a hedge
against oil-led inflation. []
Traders will be eyeing U.S. oil inventory data due out later
for clues as to the next direction for trade.
EQUITIES SLIP
Stock markets opened weaker in Europe after a lacklustre
session in Asia and losses on Wall Street on Tuesday, increasing
interest in gold as an alternative investment, analysts said.
"U.S. equities traded lower yesterday on renewed worries
over the financial sector and stock markets in Asia followed on
the way down," said Dresdner Kleinwort in a note. "This might be
positive for gold."
Silver <XAG=> also ticked up, rising to $14.72/14.78 an
ounce from $14.60/14.66 late in New York.
Holdings of the world's largest silver-backed
exchange-traded fund, the iShares Silver Trust <SLV.A>, dipped
half a percent to 6,166.57 tonnes on Monday, the last day for
which the trust has reported.
Platinum bounced back above $1,500 an ounce on Wednesday,
having shed more than 15 percent in the two weeks to Tuesday's
close on fears over weakening demand from the car industry.
Spot platinum <XPT=> rose to $1,503.00/1,513.00 an ounce from
$1,469.50/1,489.50 late in New York, off Tuesday's eight-month
low of $1,462 an ounce.
Spot palladium <XPD=> firmed in sympathy, climbing to
$314.00/318.00 an ounce from $305.00/313.00 an ounce. On
Tuesday, it touched a low of $298.00, its weakest level in
almost two years.
The $300 an ounce level remains a key support for the metal,
analysts said.
(Reporting by Jan Harvey; editing by Christopher Johnson)
