* Euro hits session highs vs the dollar after European data
* Oil prices turn higher as stocks recover
(Updates prices, adds detail)
By Jan Harvey
LONDON, July 24 (Reuters) - Gold rose back above $950 an
ounce in Europe on Friday as the dollar extended losses against
the euro after better-than-expected European economic data.
However, gains were capped by strong technical resistance,
weakness in jewellery and investment demand for the metal,
traders said.
Spot gold <XAU=> was bid at $952.60 an ounce at 1054 GMT,
against $947.15 an ounce late in New York on Thursday.
"We are still up here in quite a high range. We don't see
any physical buying coming in at these levels, but what is
supporting it is the dollar," said Andrey Kryuchenkov, an
analyst at VTB Capital.
"The dollar's weakness and the idea that inflation
expectations are on the rise are holding gold here."
When the dollar moves lower, gold becomes cheaper for
holders of other currencies, and it is also a popular inflation
hedge.
The dollar weakened against the euro on Friday after a
stronger-than-expected estimate of the German Purchasing
Managers' index and improved surveys on the euro zone services
and manufacturing sectors boosted the single currency. []
European shares also turned higher after the data, helping
to boost oil prices. But while the currency markets and strength
in crude prices are supportive of gold, underlying demand
weakness is preventing further gains. [] []
Afshin Nabavi, head of trading at Geneva's MKS Finance, said
the metal was stuck in a range between $945-960 an ounce. "A
move above $960 or below $940 ought to bring along some fresh
interest," he said.
BUYERS AT BAY
A rise in Indian gold prices above 15,000 rupees per 10
grams is keeping buying there at bay. "Traders feel
uncomfortable to bid gold at 15,000 rupees," a Mumbai-based
dealer said. []
A Reuters poll released Friday showed Indian gold prices were
expected to ease by end-September as the rupee was likely to
strengthen and domestic demand may be subdued. []
Last year India was the biggest gold jewellery consumer in
the world, accounting for nearly 475 tonnes of sales, according
to metals consultancy GFMS.
Investment demand was lacklustre, with holdings of the
world's largest gold exchange-traded fund, the SPDR Gold Trust
<GLD>, stable on Thursday after two days of outflows. []
Analysts who study historical chart patterns to determine
future price moves say the precious metal is also facing tough
technical resistance below $960 an ounce.
"The formidable resistance at the $957-$961 zone is getting
stronger with the pass of every session, and that has been
curbing the metal from witnessing any sustained gains," said
Richcomm Global Services in a note.
On the supply side, the Russian Gold Industrialists Union
said the country's production rose nearly 25 percent in the
first half of the year. []
Among other precious metals, silver <XAG=> was at $13.78 an
ounce against $13.70, platinum <XPT=> was at $1,179 an ounce
against $1,174, and palladium <XPD=> was unchanged at $255.50.
Unrest continued in South Africa, source of four-fifths of
the world's platinum and the third largest producer of gold.
South African president Jacob Zuma said police will crack down
on rioters after violent protests this week. []
(Editing by William Hardy)
