* Dollar recovers from 14-month low but still pressured
* SPDR gold ETF holdings decline 0.1 pct; Indian demand down
* ETF Securities London palladium ETC holdings hit record
(Releads, adds comment, updates prices)
By Jan Harvey
LONDON, Oct 22 (Reuters) - Gold prices eased on Thursday as
the dollar clawed back lost ground against the euro, denting
interest in the metal as an alternative to the U.S. currency.
A decline in the equity markets in early trade dented
appetite for risk, benefiting the dollar at the expense of
higher-yielding currencies.
Spot gold <XAU=> was bid at $1,051.60 an ounce at 1402 GMT,
against $1,058.35 late in New York on Wednesday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange fell $12.20 to $1,052.30.
Pradeep Unni, a senior analyst at Richcomm Global Services,
said dollar weakness was still likely to hold the metal in a
range between $1,044 and $1,071, but added that consolidation
may be necessary before another push higher.
"The dollar index is certainly oversold and oil is
overbought, and these two factors are holding the metal from a
rapid rise," he said.
"(But the) dollar is certainly under heavy pressure and the
inherent weakness in the U.S. economy may continue to provide
enough support for the yellow metal to avert a major slide."
For a graphic showing the gold price in various currencies,
click here:
http://graphics.thomsonreuters.com/109/CMD_GLDCUR1009.gif
The dollar rose on Thursday, rebounding from a 14-month low
versus the euro <EUR=>, as disappointing corporate earnings hurt
stock markets and cut appetite for risk. []
U.S. stocks opened mixed and later fell on Wall Street,
after data showed new jobless claims rose more than expected.
European shares were down 1.4 percent. [] [] []
SLACK DEMAND
Demand for physical gold remained slow, with jewellery
buying tailing off in major consumer India after last week's
festival period and as a decline in the rupee made dollar-priced
assets more expensive. []
"Post-Diwali, demand has turned slack," said a dealer with a
bullion-dealing bank.
The world's largest gold exchange-traded fund, the SPDR Gold
Trust <GLD>, also reported an outflow on Wednesday. Its holdings
fell nearly 40,000 ounces or 0.1 percent.
"Speculator interest is slowly easing, while physical demand
concerns are as ever present at record high prices," said VTB
Capital analyst Andrey Kryuchenkov in a note.
Among other precious metals, silver <XAG=> was bid at $17.34
an ounce against $17.66 late on Wednesday, tracking losses in
gold. Platinum <XPT=> was at $1,353 an ounce against $1,359.
The world's biggest platinum producer, Anglo Platinum
<AMSJ.J>, said its third-quarter production of refined platinum
fell 9.9 percent from last year. []
Lonmin <LMI.L>, the world's third-largest platinum miner,
said metal output fell 6 percent in the year to September. Chief
Executive Ian Farmer was positive on prices. []
"Jewellery demand and investment demand have been very
helpful to us and very solid, and hopefully that will continue,"
he told Reuters in an interview.
"But I think the growth area will be industrial demand as it
starts to come back over the course of the next 18 months."
Palladium <XPD=> was flat at $332.50, supported by fears
over the outlook for Russian and South African supply and hopes
for a recovery in automotive demand.
Platinum and palladium are mainly used in autocatalysts.
Investment demand is also strong. ETF Securities said
holdings of its London palladium exchange-traded commodity rose
nearly 9,000 ounces on Wednesday to record highs. []
(Additional reporting by Julie Crust; Editing by Sue Thomas)
