* Falling European stock markets help lift dollar from lows
* Talks commence between Implats, union over SAfrican strike
* Palladium prices hit year high
(Updates prices)
By Jan Harvey
LONDON, Sept 1 (Reuters) - Gold prices steadied in Europe on
Tuesday, giving up earlier gains as a decline in European stock
markets helped the dollar recover initial losses against a
basket of six major currencies.
Spot gold <XAU=> was bid at $949.90 an ounce at 1135 GMT,
against $949.65 an ounce late in New York on Monday, having
earlier touched a high of $955.00.
Tom Kendall, precious metals strategist at Mitsubishi Corp,
said positive Chinese data earlier in the session had helped
commodities and stock markets to make initial gains, but that
gold had retreated as the dollar recovered.
"Equities and commodities will be waiting for U.S. ISM
manufacturing, construction spending and pending home sales data
this afternoon," he said.
"Precious metals are all very weighted to the long side, but
could make further gains if the data continue to support the
global economic recovery story."
Gold sometimes benefits from economic uncertainty as it is
bought as a safe store of value, but analysts are hoping a
positive view of the economy will help ailing jewellery and
industrial sales.
U.S. gold futures for December delivery <GCZ9> on the COMEX
division of the New York Mercantile Exchange eased $2.30 to
$951.20 an ounce.
The dollar pared losses against the euro <EUR=> and a
currency basket <.DXY> as European shares fell, denting the risk
appetite that had benefited higher-yielding currencies in
earlier trade. [] []
Oil prices also eased from highs to turn weaker, undermining
support for gold as an inflation hedge. []
Gold demand in India, the world's largest bullion market
last year, abated as traders awaited further price falls. Some
buying was seen after prices slipped below $950 an ounce, but
this had not persisted, traders said. []
IMPORTS FALL
India's gold imports fell to 12-14 tonnes in August from 98
tonnes a year before as high prices and weak monsoon rains
dented demand, the head of the Bombay Bullion Association said.
[]
Gold imports to Turkey, one of the top three consumers of
the metal, also fell 74 percent year-on-year to 12.517 tonnes,
as demand in the local market weakened. []
Among other precious metals, silver <XAG=> eased to $14.73
an ounce against $14.89, pressured by losses in industrial
metals. Platinum <XPT=> was at $1,236 an ounce against $1,237,
while palladium <XPD=> was at $288 against $288.50.
Palladium rose to a year high of $291.50 an ounce in earlier
trade, helped by hopes demand for the autocatalyst material may
recover and strength in other precious metals.
"Palladium... has the potential to test the $300-05 area,
however we remain concerned about the level of speculative longs
in the market," said The BullionDesk.com analyst James Moore.
"(These) leave the metal vulnerable to a rapid correction
should those longs become spooked."
Talks between South Africa's mine workers' union and Impala
Platinum <IMPJ.J>, the world's second-largest platinum producer,
began on Tuesday in an attempt to end a week-long strike over
wages. []
Platinum prices have been supported by the action, but are
gaining little new upward momentum as weak demand from the
automotive sector and the perception that above-ground stocks
are plentiful weigh on buying interest.
(Editing by Sue Thomas)
