* Gold slips as dollar firms, stocks tick up in Europe
* Softer opening on Wall St lifts gold off lows
* Platinum extends slide as supply fears recede
(Recasts, adds comment, updates throughout)
By Jan Harvey
LONDON, July 18 (Reuters) - Gold was softer on Friday but
recovered from a more than 1 percent dip earlier in the day, as
Wall Street equities opened lower and the dollar retreated from
session highs.
Spot gold <XAU=> eased to $957.40/958.40 an ounce at 1438
GMT from $962.10/963.10 an ounce late in New York on Thursday,
having earlier slipped as low as $949.50 an ounce.
The precious metal slipped to a one-week low in early
afternoon trade after better-than-expected earnings from the
U.S.' largest bank, Citigroup, boosted the dollar and sent
equity markets higher in Europe.
But a dip in stocks when Wall Street opened, as the market
reacted to disappointing earnings from Microsoft <MSFT.O> and
Google <GOOG.O> released after the bell on Thursday, boosted
interest in the metal as an alternative investment to equities.
"In the last few weeks, where the equity markets started to
tumble, gold has started to shoot up, so there has been a good
link," said Standard Chartered analyst Dan Smith.
"Safe haven buying of gold, and to some extent silver, has
been in evidence."
The dollar also came off highs against the euro, having
rallied against a basket of currencies earlier in the session
after the Citigroup news. []
Gold tends to benefit from a weaker dollar, as it is often
bought as a hedge against currency weakness.
The other main external driver of gold, oil, was lacklustre.
New York crude futures have dropped around 12 percent from the
record high of $147.27 they hit at the end of last week, despite
a small bounce on Friday. []
Weaker oil prices tend to drag gold lower, both because the
precious metal is often bought as an inflation hedge and because
softer crude can weaken interest in commodities as a whole.
Other commodities such as copper, aluminium and wheat were
also lower.
PLATINUM SLIDES
Spot platinum <XPT=> slipped on Friday for a fifth
successive day, after supply fears linked to an electricity
shortage in South Africa receded.
The South African treasury said it will lend the state-owned
power utility Eskom 10 billion rand in the 2008/09 financial
year to help it expand its generating capacity. []
Eskom already helped ease supply fears on Thursday, after it
said it does not expect further power cuts in the republic this
season. []
An electricity shortage in South Africa, which produces four
out of five ounces of global platinum supply, sent the white
metal to an all-time high of $2,290 an ounce in March as
investors worried about the outlook for production.
However, with supply fears receding, traders are switching
their attention to the demand picture.
Prices have fallen around $170 an ounce, or 8.5 percent,
from late last Friday as the market factors in a weaker picture
for the U.S. auto market this year.
Platinum is a major component in autocatalysts, and any
reduction in car manufacturing is likely to weaken demand.
"From both a demand and supply perspective, the fundamental
picture has turned more bearish than was the case in (the first
half of) 2008," said Standard Bank analyst Walter de Wet in a
note from Johannesberg.
"We reiterate that high energy prices and lower demand for
motor vehicles, combined with signs that supply disruptions from
power cuts are unlikely, should prevent a platinum rally."
Spot platinum fell to $1,855.00/1,865.00 an ounce from
$1,881.00/1,901.00 late in New York on Thursday, having hit a
session low of $1,836.50, its weakest level since May 2.
Among other precious metals, spot palladium <XPD=> slipped
to $417.00/422.00 an ounce from $420.00/428.00 an ounce, while
silver <XAG=> edged down to $18.32/18.37 an ounce from
$18.39/18.48 late in New York.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
