* Growing optimism over economic recovery undermines gold
* Asian buyers take a break during Lunar New Year holiday
* Coming up: ECB interest rates announcement, 1245 GMT
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Feb 3 (Reuters) - Gold eased in Europe on Thursday
as growing optimism over the economic recovery curbed interest
in the metal as a haven from financial market risk, and as Asian
buying dissipated during the Lunar New Year holiday.
Spot gold <XAU=> was bid at $1,328.70 an ounce at 0950 GMT,
against $1,336.00 late in New York on Wednesday. U.S. gold
futures for April delivery <GCJ1> fell $2.60 to $1,329.50.
Concerns over the fallout from unrest in Egypt, where five
people were killed after supporters of president Hosni Mubarak
opened fire on protestors overnight, have underpinned prices,
but have not sparked fresh investment, analysts said. []
"Since the sell-off across the commodity complex in early
January, oil and industrial metals have rallied but the precious
metals have been the laggards," said RBS analyst Daniel Major.
"That is due to a combination of better economic data (and) less
need for safe havens."
"Whilst the Egyptian events have clearly had some kind of
risk-negative impact on equity markets and the broader
commodities complex, I don't think it has been sufficient to
drive investors in Europe and the United States into gold."
Other commodities rose on Thursday, with Brent crude oil
climbing above $103 a barrel after violent clashes in Egypt and
copper breaking $10,000 a tonne to a record high. [] []
The financial markets were quiet ahead of an interest rates
announcement from the European Central Bank. The ECB is expected
to keep rates at a record low 1.0 percent, but its accompanying
statement will be eyed for pointers on future policy.
"ECB President Trichet will likely maintain his recent
hawkish stance, given January's above-target CPI print," said
UBS analyst Edel Tully in a note.
"Rising market expectations for rate hikes in Europe, the UK
and elsewhere have contributed to gold's recent descent... this
relationship is likely to remain in place in the near term, so
hawkish comments from Trichet could pressure gold later today."
European shares softened a touch ahead of the announcement,
while the euro hovered near the previous session's 12-week high
versus the dollar <EUR=>. [] []
LUNAR NEW YEAR DENTS ASIAN BUYING
Buying was also lacklustre in key gold consuming regions,
with buyers absent in China, Hong Kong and Singapore for the
Lunar New Year holiday. []
From a technical perspective, gold prices seem to have built
a base above $1,300 an ounce, but is looking vulnerable to
further declines, according to analysts who study charts of past
price moves to determine future direction.
"The price action between the $1,320s and $1,340s is forming
into a typical consolidation pattern," said ScotiaMocatta in a
note. "While the $1,354 holds we believe the risk is a return to
the downside toward $1,308."
Among other precious metals, silver <XAG=> was bid at $28.24
an ounce against $28.36. The world's largest silver-backed
exchange traded fund, the iShares Silver Trust <SLV>, reported
another outflow on Wednesday.
Both the iShares fund and the biggest gold ETF, the SPDR
Gold Trust <GLD>, saw hefty outflows in January, with the
iShares seeing its biggest ever one-month decline and the SPDR
fund its second-largest such outflow. []
Elsewhere, platinum <XPT=> was at $1,822.24 an ounce against
$1,829.99, while palladium <XPD=> was at $806.97 versus $811.22.
Data showed Switzerland, one of the leading clearers of
platinum group metals in Europe, imported 6,374 kg of platinum
and 829 kg of palladium in December. []
(Reporting by Jan Harvey; Editing by Alison Birrane)
