* Gold eases towards $1,080/oz as euro languishes
* Asian demand picks up ahead of festivals as prices dip
* U.S. platinum, palladium ETF flows pause
(Updates, adds comment, changes dateline from TOKYO)
By Jan Harvey
LONDON, Jan 29 (Reuters) - Gold eased in Europe on Friday as
the dollar held near multi-month highs versus the euro, with
doubts over the outlook for smaller euro zone economies, mainly
Greece, curbing interest in the single currency.
Spot gold <XAU=> was bid at $1,082.55 an ounce at 1035 GMT,
against $1,086.75 late in New York on Thursday. In that session
it hit a near three-month low of $1,073.75.
"There is a lot going on in the forex markets, and that is
the main driver this morning," said Simon Weeks, head of
precious metals at the Bank of Nova Scotia.
The euro steadied after losses that took it to its lowest
since July versus the dollar in Asian trade, but remains on
track to fall 2.5 percent against the dollar for the month,
after a 4.5 percent drop in December. []
Dollar strength has been a key factor pressuring gold so far
this year, prompting a 1 percent drop in prices since Dec. 31.
A firmer U.S. unit cuts gold's appeal as an alternative
asset and makes dollar-priced commodities more expensive for
other currency holders.
Gold traders are eyeing key U.S. data due later in the
session for its impact on the dollar, especially fourth-quarter
gross domestic product numbers due at 1330 GMT. []
On the physical side, Indian gold demand continued to pick
up on Friday as traders took advantage of easing prices to build
stocks to meet upcoming wedding demand. []
They are hoping for further losses. "There are a lot of
orders below $1,075," said a dealer at a private bank in Mumbai.
Also in Asia, gold bars were offered at the highest premiums
in more than a year as demand from China gained pace ahead of
the Lunar New Year, dealers said. []
ETF HOLDINGS STEADY
Holdings of the world's largest exchange-traded fund, New
York's SPDR Gold Trust, were unchanged for a seventh straight
session on Thursday, the trust's data showed. []
Overall its holdings are down 21.7 tonnes or 1.9 percent so
far this year. In the same period of 2009, they rose 52.65
tonnes or 6.7 percent.
From a chart perspective, gold is now looking vulnerable,
according to analysts who study past price moves to determine
future trade.
"The close below the 100-day (moving average) at $1,089 is a
first since July 2009 and increases the odds for a deeper probe
of $1,074/1,067 support -- the December lows and ten-month
trendline -- where we would be looking for basing signs," said
technical analysts at Barclays Capital.
"A meaningful break below this trendline however would force
us to reassess and allow for a sharper slide to $1,025/32."
Among other precious metals, silver <XAG=> was bid at $16.24
an ounce against $16.20. Platinum <XPT=> was at $1,505 an ounce
against $1,508, and palladium <XPD=> at $413 against $418.50.
Buying of the platinum group metals to back new U.S.
exchange-traded funds tailed off at the beginning of this week,
data from ETF Securities, which operates the funds, showed.
Holdings of the company's U.S. platinum fund <PPLT.P> were
steady on Thursday at 214,890 ounces, it said, while its U.S.
palladium holdings <PALL.P> were unchanged for a second session
at 399,925 ounces.
Changes to the funds' holdings normally appear in the data
two or three days after a transaction. Heavy buying of the ETFs
sparked hefty price rises the previous week. []
(Editing by Sue Thomas)
