* Gold reverses earlier gains as dollar gains vs euro
* U.S home prices data gives dollar a boost vs euro
(Recasts, updates prices and comments)
By Nick Vinocur
LONDON, June 30 (Reuters) - Gold dipped on Tuesday, as the
dollar erased earlier losses and rose against the euro after
data showed the fall in the prices of U.S. single-family homes
moderated in April.
Spot gold <XAU=> fell as low as $932.80 an ounce and was at
$934.60 an ounce by 1333 GMT, versus $937.05 an ounce late in
New York on Monday. The price earlier hit a high of $944.70 and
has found support around $940.
"Gold is following the dollar," said senior trader Michael
Kempinski at Commerzbank. "Euro/dollar falling below $1.41
triggered some profit-taking in gold," he said.
Prices of U.S. single-family homes declined in April from
the prior month, but the pace moderated, suggesting stability is
emerging in some regions, according to Standard & Poor's/Case
Shiller home price indexes reported.[]
Oil prices reversed earlier gains and dipped towards $71 a
barrel, dampening bullion's appeal as a potential hedge against
oil-induced inflation.[]
"The focus is turning to fears of inflation rather than fears
of deeper recession," said Matthew Turner, an analyst at VM
Group.
"But there are no immediate signs of inflation anywhere for
now, so investors are looking to the long term, and of course
when inflation does start to go up, the price of gold will be
rising well ahead of it."
UPSIDE CAPPED FOR NOW
Analysts said gold's upside could well face resistance if
risk appetite kept pro-risk markets, like stocks, in buoyant
mode.
"If we see improving macro data -- especially U.S. non-farm
payrolls -- obviously you will have equities rallying, and when
equities rally there is little point in holding gold," said
Andrey Kryuchenkov, an analyst at VTB Capital.
European equities were flat at midday, while U.S stock
futures pointed to a flat open after the U.S. data. [][]
"You will have to see significant dollar pullback and
full-blown inflation to get the thrust we need to retest above
$1,000 -- and we are still in a deflationary phase," he added.
U.S. gold futures for August delivery <GCQ9> fell to $935.70
per ounce, down 0.5 percent from the previous settlement on the
COMEX division of the New York Mercantile Exchange.
Gold was on track to lose almost 4 percent this month, but
was poised for a gain of about 7 percent for the first half of
the year.
On the investment front, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust, said its holdings
remained at 1,125.74 tonnes as of June 29, unchanged since June
25. The holdings were down 0.7 percent from a record high marked
in early June. []
Other precious metals kept some of their gains. Spot silver
<XAG=> was at $13.94 against $13.84 quoted late in New York,
platinum gaining to $1,184.00 against $1,182.00 previously, and
palladium <XPD=> was flat at $247.00.
(Reporting by Nick Vinocur, additional reporting by Humeyra
Pamuk and Pratima Desai, Editing by Keiron Henderson)
