* Dollar hits near 6-week high versus euro on Greece woes
* Indian buying picks up as gold prices fall
* SPDR gold ETF holdings steady but down in 2010 so far
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 21 (Reuters) - Gold prices fell towards $1,100
an ounce in Europe on Thursday as the dollar's rise to a near
six-month high versus the euro curbed buying of the precious
metal as an alternative asset.
Spot gold <XAU=> was bid at $1,104.05 an ounce at 1322 GMT,
against $1,111.10 late in New York on Wednesday. U.S. gold
futures for February delivery <GCG0> on the COMEX division of
the New York Mercantile Exchange fell $8.20 to $1,104.40.
The dollar hit a near six-month high versus the euro <EUR=>
on Thursday as investors, spooked by concerns over Greece's
rising debt, sold the single currency. []
Strength in the dollar versus the euro reduces gold's appeal
as an alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Daniel Major, an analyst at RBS Global Banking & Markets,
said the dollar had broken through key technical levels and was
expected to firm further. "Gold could see more downside from
that," he said.
"There have been some reasonably positive signs from the
jewellery market, but from the investment side, in the last two
or three weeks we have seen modest but persistent redemptions
from the exchange-traded funds," he added.
"In terms of the net speculative long position on COMEX, the
market still remains reasonably long," he added. "That leaves
potential for some liquidation."
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, were steady on
Wednesday, but are down 21.7 tonnes or 1.9 percent this year. In
the same period of 2009, they rose 22.7 tonnes.
Holdings of the main silver ETF, the iShares Silver Trust
<SLV>, have also fallen 154 tonnes in 2010 to date.
Traders say some investors with an interest in precious
metals ETFs are pulling money out of the SPDR and the iShares
fund in favour of new U.S. platinum- and palladium-backed ETFs.
OIL STEADY
In India, historically the world's largest consumer of gold,
traders continued to buy as prices hit new two-week lows.
"Yesterday's sales were highest in the month," said a dealer
with a state-run bank. []
On the wider markets, oil prices were steady, supported by
strong Chinese growth data. European stocks rose around midday
on Thursday after hitting a 2-1/2 week low earlier, while U.S.
stock futures climbed after Goldman Sachs' fourth-quarter
results. [] [] []
Among other precious metals, spot platinum <XPT=> was at
$1,601.50 an ounce versus $1,622.50, while palladium <XPD=> was
at $459.50 versus $465.
Lease rates for the two metals have risen steadily since the
launch of the ETFs operated by a U.S. unit of London's ETF
Securities, dealers said.
Silver <XAG=> was at $17.63 an ounce against $17.87,
following gold lower.
"Since silver tends to disproportionally track the movements
of gold, and since we expect the gold price to correct in the
spring, silver is likely to weaken temporarily as well,"
Commerzbank said in a note. "Prices could fall to as low as
$15.00 an ounce."
(Editing by Anthony Barker)
