* Dollar at session lows versus euro after JPMorgan earnings
* Physical gold demand still lacklustre on seasonal weakness
* Reuters precious metals price poll shows fresh optimism
(Releads, adds comment, updates prices)
By Jan Harvey
LONDON, July 16 (Reuters) - Gold slipped on Thursday as the
dollar pared losses against the euro after a weak reading of the
Philly Fed manufacturing index, with lacklustre demand for
physical stocks of the metal also pressuring prices.
The data pushed Wall Street stocks lower as traders worried
about the implications of the 10th consecutive contraction of
factory activity in the U.S. mid-Atlantic region for the wider
U.S. economy.
It also sparked buying of the dollar as investors spurned
currencies such as the euro which are seen as higher risk.
[]
"Euro-dollar... is the main driver at the moment of the gold
price," said Michael Blumenroth, a trader at Deutsche Bank.
Spot gold <XAU=> was bid at $934.40 an ounce at 1429 GMT,
versus $938.45 an ounce late in New York on Wednesday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange dipped $4.80 to $934.60 an ounce.
A softer dollar typically boosts interest in bullion as a
currency hedge and makes it cheaper for other currency holders.
A dearth of demand for jewellery and bullion to back
exchange-traded funds is also capping gains, traders said.
Indian gold prices were supported by the weak rupee, but
buyers stayed away during a seasonally weak period for sales.
Holdings of the largest gold ETF, the SPDR Gold Trust <GLD>,
were unchanged on Wednesday. [] []
"I am surprised gold is at this high level, given the lack
of demand," said Commerzbank analyst Carsten Fritsch. "We have
seen outflows from the SPDR of 15 tonnes on Tuesday alone, and
there is still lacklustre jewellery demand."
"The only factor supporting gold is dollar weakness," he
said.
EARNINGS DUE
Investors are awaiting a further raft of earnings due in the
United States on Friday, with Citigroup <C.N>, General Electric
<GE.N> and Bank of America <BAC.N> all due to release figures.
A poll of precious metals price forecasts conducted by
Reuters showed sentiment towards the assets has improved since
the last such survey in January. []
The average 2009 gold forecast taken from the poll rose 7.8
percent in that period to $930 an ounce, while the expected
silver price rose by 18 percent.
"The major factor for the precious metals markets will be
the recovery of the global economy and inflation fears," said
Peter Fertig, a consultant at Quantitative Commodity Research.
Platinum prices forecasts were on average 17 percent higher
than in January, at $1,130 an ounce in the full year, while the
average palladium forecast was up nearly 10 percent to $230.
While both metals are expected to benefit from the improving
outlook for car sales, industrial demand for the metals used in
autocatalysts is not expected to recover until 2010.
Platinum <XPT=> was at $1,155.50 an ounce against $1,156,
while palladium <XPD=> was at $245.50 against $244.50 and silver
<XAG=> was at $13.25 an ounce against $13.25.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
