* Gold regroups; dollar pressed into broad retreat
* Long-term inflation expectations in focus
(Adds comments, updates prices)
By Nick Vinocur
LONDON, July 1 (Reuters) - Gold climbed above $940 on
Wednesday, bouncing back from a sell-off the previous day, as
the dollar slid against the euro and higher crude prices boosted
the metal's appeal as a potential hedge against inflation.
Spot gold <XAU=> rose as high as $941.80 to trade at $937.30
by 1541 GMT, up from $925.85 quoted late in New York. It fell to
$922.60 per ounce on Tuesday, its lowest since June 24.
The precious metal jumped almost $10 after the dollar/euro
exchange rate turned sharply in favour of the euro. []
Analysts said long-term inflation expectations were boosting
gold's appeal and further data reinforcing those views would
help the metal to build on its gains.
"The gold market has been firm ever since the Fed announced
the shift to quantitative easing... That is the reason gold is
above $900 at the moment and not below," said James Steel, an
analyst at HSBC in New York. "It will keep intermittently
rallying on inflation expectations," he added.
But the economic data remained mixed. U.S. manufacturing
mustered its highest level of activity in nearly a year in June
but unexpected weakness in private sector employment signalled
how slow an economic recovery might be. []
BUYERS WADE IN
David Wilson, analyst at Societe Generale, said buyers of
physical gold were slowly wading back into the market, while
flows of scrap gold were showing signs of stabilisation.
"Demand from the jewellery sector seems to have stabilised,"
he said. "Physical buyers are getting used to the higher price
range and looking at any dip as an opportunity."
U.S. gold futures for August delivery <GCQ9> were at $939.4
an ounce, up more than one percent from the previous settlement
on the COMEX division of the New York Mercantile Exchange.
Holdings by the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, fell again on Tuesday by 5.19
to 1,120.55 tonnes as of June 30. The holdings are down 13.48
tonnes from a record high on June 1. []
SPDR holdings have declined in the past few weeks as
a sense of optimism about the global economy sapped investors'
appetite for bullion as a safe-haven asset. <XAUEXT-NYS-TT>.
In other precious metals, spot silver <XAG=> rose to $13.68
per troy ounce against $13.57 in New York, while platinum <XPT=>
gained to $1,194.50 versus $1,172.50 previously and palladium
<XPD=> climbed to $252.00 from $248.00.
Andrey Kryuchenkov, analyst at VTB Capital, said industrial
metals such as silver could rise as the macro-economic picture
improved, while platinum holders were paying close attention to
U.S. car sales data.
"Platinum and silver look more interesting in the long run,
as their industrial appeal will start to come back," he said.
(Additional reporting by Risa Maeda in Tokyo; editing by James
Jukwey)
