* Caution hits markets after mixed U.S. earnings
* Firm dollar keeps a tight rein on gold
(Updates prices, adds comment)
By Jan Harvey
LONDON, July 17 (Reuters) - Gold eased on Friday as the
dollar firmed, denting interest in the precious metal as a
currency hedge, with worries over mixed earnings reports from
U.S. corporates blunting appetite for risk on the wider markets.
Spot gold <XAU=> was bid at $932.40 an ounce at 1219 GMT,
against $936.35 an ounce late in New York on Thursday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange fell $2.90 to $932.50 an ounce.
The dollar rose against the euro <EUR=> and versus a basket
of currencies <.DXY> as concerns over how major U.S. companies
are faring encouraged investors to shy away from risk. []
"Most bullion moves have been largely currency driven and
the market is having to closely watch dollar index movement,
which seems to have been clinging on to the 79-80 support zone
for quite a while," said Richcomm Global Services senior analyst
Pradeep Unni.
"Any uptick in the dollar index would clearly mean gold
would have to give up its gains, succumbing to dollar pressure."
On the wider markets, S&P 500 stock index futures fell to
session lows as mixed quarterly results from index heavyweights
General Electric <GE.N>, Bank of America <BAC.N> and Googlec
<G.N> spurred caution. []
Citigroup <C.N> meanwhile reported net second-quarter income
of $4.3 billion, and diluted earnings per share of 49 cents,
beating forecasts. []
Oil slid more than 1 percent to below $62 a barrel and base
metals also declined, as traders turned away from industrial
commodities amid lingering concerns over the outlook for the
global economy. [] []
LULL
Demand for both investment gold and jewellery remained soft
during the summer lull.
Holdings of the largest gold exchange-traded fund, the SPDR
Gold Trust <GLD>, inched up 0.31 tonnes on Thursday. However,
London's ETF Securities said it saw an outflow of nearly 40,000
ounces that day from its ETFS Physical Gold <PHAU.L> product.
Elsewhere silver <XAG=> was at $13.09 an ounce against
$13.27. The metal has largely recovered the losses that took it
to a 10-week low on Monday, as a slip in the dollar lifted gold
prices and as investors took advantage of low prices to buy.
The largest silver ETF, iShares Silver Trust <SLV> saw
inflows of more than 42 tonnes earlier this week.
"Silver is our favourite metal from a bullish technical
perspective," ScotiaMocatta said in a note.
The ratio of gold to silver had moved down to 70.8 on
Friday, after rising to nearly 73 as silver slipped to its week
low on Monday. At the height of gold and silver's rally on June
3, it fell as low as 60.1.
Among other precious metals, platinum <XPT=> was at $1,159.50
an ounce against $1,160.50, while palladium <XPD=> was at $245
against $245.50.
"Traders are keeping a close eye on wage negotiations in
South Africa after unions declared a dispute with power producer
Eskom, with strikes likely to disrupt metal supplies," said
James Moore, an analyst at TheBullionDesk.com.
Three South African trade unions declared a dispute with
Eskom <ESCJ.UL> after failing to agree on a pay rise and
benefits. []
(Reporting by Jan Harvey; Editing by Anthony Barker)
