* Stock markets rise in Europe as year kicks off
* Commodities tumble as dollar erases losses to turn higher
* Coming up: minutes of Fed Dec. 14 meeting, 1900 GMT
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By Jan Harvey
LONDON, Jan 4 (Reuters) - Gold tumbled more than 2 percent
on Tuesday and was on track for its biggest one-day loss since
early November as the dollar rose and investors opted for assets
seen as higher risk, like stocks, at commodities' expense.
Expectations that the euro zone debt crisis could worsen,
concerns over the potential for inflation in developing
economies and an increased focus on the U.S. deficit are set to
underpin investment demand for gold, however, analysts said.
Spot gold <XAU=> was bid at $1,384.20 an ounce at 1609 GMT,
against $1,414.00 late in New York on Monday. U.S. gold futures
for February delivery <GCG1> fell $37.70 an ounce to $1,385.20.
The metal reached its highest in nearly a month on Monday at
$1,423.57 an ounce, but struggled to hold gains after purchasing
managers' indexes showed manufacturing growth quickened in the
United States and Europe, boosting risk appetite.
[] []
"The PMI data in particular is suggesting things are getting
better rather than worse," Macquarie analyst Hayden Atkins said.
"Maybe gold will take a bit of a back seat from a performance
point of view for the next month or so."
On the currency markets, the euro surrendered gains which
had pushed it to a three-week peak against the dollar on Tuesday
after investors decided growth prospects for the U.S. economy
were better than those in Europe. []
Bund crude oil futures fell into negative territory as
industrial commodities and stocks continued to benefit from an
improved economic outlook and growing investor risk appetite,
limiting demand for low-yielding government debt. []
European stocks rallied to a one-week high. []
"Pressure (on gold) is expected to return over the next week
or two based on our expectation for a reversal in oil prices,
gains in the stock market and general stability in the dollar,"
MF Global said in a note.
Other commodities succumbed to dollar strength, with oil and
copper retreating after nearing more than two-year high and a
record peak respectively. [] [] []
RISK APPETITE FIRM
While risk appetite was firm in the early trading days of
2011, plenty of safe-haven support remains for gold, as concerns
persisted over debt levels in the euro zone and over the outlook
for U.S. growth.
"The majority of factors for gold are very positive," said
Credit Suisse precious metals analyst Tom Kendall.
"If you were looking for negatives, you would have to say
the lack of any sizeable dehedging programme this year from the
miners would be one that you could pick up on, but from the
investment community, sentiment is still very much bullish
towards gold."
But gold demand in the world's biggest bullion consumer,
India, was weak on Tuesday as the country's wedding season
neared its end. "There is less demand as prices are really
volatile," said one dealer. "Some stagnation is coming."
[]
Spot silver <XAG=> slid to $29.89 an ounce from $30.66 an
ounce, retreating from the previous session's peak of $31.22,
its highest since 1980.
Platinum <XPT=> was at $1,744.75 an ounce against $1,766,
while palladium <XPD=> was at $771.50 against $789.97.
Both platinum group metals, which are primarily used in auto
catalysts, are expected to build on last year's gains in 2011 as
demand for cars continues to rise, particularly in the key
Chinese market.
Beijing's decision to limit new car registrations in the
capital, announced in late December, was expected to cool the
country's fast-expanding auto sector, however. []
(Reporting by Jan Harvey; Editing by William Hardy)
