* New-year flows into commodities support gold
* Euro recovers early losses after reported ECB comments
* Auto sales recover in December after weak 2009
(Updates, adds comment, changes dateline from TOKYO)
By Jan Harvey
LONDON, Jan 6 (Reuters) - Gold prices climbed in Europe on
Wednesday as fresh New Year investment flows boosted
commodities, with technical indicators pointing to the prospect
of further gains.
The metal rose further after the euro recovered the early
losses it made following a media report quoting European Central
Bank executive board member Juergen Stark as saying the European
Union would not bail out Greece.
Spot gold <XAU=> was bid at $1,126.40 an ounce at 1003 GMT,
against $1,118.10 late in New York on Tuesday. U.S. gold futures
for February delivery <GCG0> on the COMEX division of the New
York Mercantile Exchange rose $8.00 to $1,126.70 an ounce.
"We have an attractive interest rate environment for gold,
and investment inflows into commodities are supporting gold
prices," said Commerzbank analyst Eugen Weinberg.
"The performance of gold will also be dependent on what's
going on in the dollar," he added.
The euro fell against the dollar early on Wednesday after
Stark's comments, though it later recovered losses. However,
trading was cautious ahead of key U.S. jobs data on Friday as
investors await evidence of how the economy is faring. []
The key payrolls data is expected to shape expectations for
when the Federal Reserve will start tightening its ultra-loose
monetary policy and determine the direction of the dollar.
Strength in the U.S. unit curbs gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Ahead of non-farm payrolls, traders are also eyeing ADP jobs
data due later on Wednesday, which is seen as a key precursor to
the main report.
Other commodities such as industrial metals also climbed,
with copper rising to its highest since August 2008. The metals
are being lifted by a switch out of currencies and into
commodities, which is also lifting gold, traders said. []
TECHNICAL INDICATORS
From a technical perspective, gold is poised for further
gains, said analysts who study past price movements for clues as
to future trading patterns.
"With net speculative length having unwound from recent
extremes, the near-term prospects for gold have improved," said
technical analysts at Barclays Capital.
"Furthermore, with daily momentum rolling higher from
oversold conditions and price action having repeatedly held
trendline support, odds favour continued gains."
If near-term resistance is confirmed, gold could push back
towards the top end of its current range at $1,200 an ounce,
they said, close to the record high of $1,226.10 an ounce it
reached in December.
In India, historically the world's largest gold market,
strength in the rupee ignited gold buying, but Chinese consumers
have yet to return to the physical market despite the
approaching Lunar New Year, dealers said. []
Among other precious metals, silver <XAG=> was bid at $17.98
an ounce against $17.76, platinum <XPT=> was at $1,543 an ounce
against $1,528.50 and palladium <XPD=> at $421.50 against $418.
Platinum group metals traders welcomed news that U.S. auto
sales hit 11.25 million in December, the fourth month of
consecutive improvement after a weak year. Carmakers account for
more than half of platinum consumption. []
Elsewhere the world's biggest automaker, Toyota <7203.T>,
said it sold 21 percent more cars in China in 2009 than a year
earlier, while GM's China sales rose 67 percent. []
The two platinum group metals hit their highest in over a
year on Tuesday, with news that exchange-traded funds backed by
the metals will be launched in the United States lifting prices.
"Signs of recovery in the U.S. auto market and expectations
U.S. ETFs could soon begin trading continue to underpin PGM
price," said James Moore, an analyst at TheBullionDesk.com.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
