* Dollar slips vs basket of currencies
* Bullion/equities link weakens as currencies return to fore
* ETFS Physical Platinum up almost 1 percent
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, June 16 (Reuters) - Gold rose 0.8 percent in Europe
on Tuesday, reversing some of the previous session's losses, as
a downturn in the dollar fuelled buying of the precious metal as
a currency hedge.
The dollar slipped against a basket of currencies after
Russia said the world needed new reserve currencies, with
traders interpreting the comments to mean it will cut the share
of U.S. assets in its currency portfolio. []
Spot gold <XAU=> was bid at $935.30 an ounce at 0849 GMT,
against $927.85 an ounce late in New York on Monday.
Gold's moves are "all U.S. dollar-driven at the moment",
according to senior Commerzbank trader Michael Kempinski. "If
the U.S. dollar does not weaken dramatically again, we should
see gold coming further off."
He said physical demand was expected to return to the market
if gold slipped below $900 an ounce.
The precious metal has fallen sharply from the three-month
high of $989.80 it hit earlier this month, as a dollar rally
dampened investors' interest in gold and made dollar-priced
commodities more expensive for holders of other currencies.
Gold's moves are likely to remain closely pegged to those of
the dollar. Stock markets, weakness in which traders say has
helped buoy the U.S. currency, turned lower again in Europe,
tracking losses in Wall Street. []
Asian stocks had already fallen as investors cut their
holdings of assets seen as riskier in favour of the safe-haven
yen. []
"Gold was sold off alongside fresh profit-taking on the
global equities markets," VTB Capital analyst Andrey Kryuchenkov
said in a note.
"Once again, this highlights that the precious metal's
attractiveness as a hedge against market risks has diminished
dramatically."
MOMENTUM
"It is now clear that the buying momentum in gold could only
have a significant recovery on the back of rising inflation
expectations and a tumbling dollar," he added.
Oil edged back above $70 a barrel as the dollar weakened.
[] Gold prices often track those of crude, as the metal can
be bought as a hedge against inflation.
Among other precious metals, silver <XAG=> was at $14.26 an
ounce against $14.05.
Platinum <XPT=> was at $1,218.50 an ounce against $1,204,
while palladium <XPD=> was at $246 against $240.50. Both are,
like gold, tracking the dollar and overall interest in
commodities.
Interest in platinum exchange-traded funds -- which issue
securities backed by metal -- remains firm, with the Physical
Platinum fund <PHPT.L> up another 3,000 ounces or nearly 1
percent on Monday.
"(Platinum) should find further support ahead of $1,200 from
bargain hunters, as reflected by the increase in ETF holdings,"
said James Moore, an analyst at TheBullionDesk.com.
But the metals remain pressured by fears over the outlook
for carmakers, their main buyers. New car registrations in
Europe fell for a 13th month in May as companies struggled to
make sales without government incentives. []
(Editing by Sue Thomas)
