* Dollar softens a touch but weaker oil limits gains in gold
* SPDR Gold Trust bullion holdings hit new record
* Platinum prices rise 2 percent to above $1,000/oz
(Updates throughout, changes dateline, pvs TOKYO)
By Jan Harvey
LONDON, Jan 7 (Reuters) - Gold steadied in Europe on
Wednesday, with a softer dollar and firm investment demand
supporting prices but weaker oil markets keeping a lid on gains.
Platinum meanwhile climbed to a near three-month high as
investors switched their attention from fears over demand from
carmakers -- the major buyers of the precious metal -- to the
gloomy outlook for production as prices fall.
Spot gold <XAU=> was quoted at $864.10/865.70 an ounce at
1055 GMT, against $863.35 late in New York on Tuesday. U.S. gold
futures for February deliver <GCG9> on the COMEX division of the
New York Mercantile Exchange were down 70 cents at $865.30.
"Gold has found pretty good support around yesterday's
close," said Citi analyst David Thurtell. "(Bullion) is looking
strong, if you look at the bigger picture. Investors are looking
for alternative assets at the moment."
The precious metal is benefiting from falling interest
rates, which cut the opportunity cost in holding gold, and from
uncertainty over the global economic outlook, he said.
The dollar is also providing some short-term support. It
slipped broadly on Wednesday after striking a one-month high
against the euro as traders fretted over the outlook for the
U.S. employment market. []
Gold is often bought as an alternative investment to the
U.S. currency and tends to move in the opposite direction to it.
Demand for the precious metal to back exchange-traded funds
is also firm. The world's largest gold-backed ETF, the SPDR Gold
Trust <GLD>, said its holdings rose to a record 788 tonnes on
Tuesday. []
SPDR has now overtaken the Bank of Japan as the seventh
largest holder of gold worldwide, Commerzbank said.
However, weakness in oil is capping gains in gold. Crude
prices slipped towards $48 a barrel on Wednesday as gloomy U.S.
economic data sparked a bout of profit taking. []
Traders are now looking ahead to economic data due later in
the week, including key U.S. non-farm payrolls data on Friday,
for clues as to the next direction of trade.
Disappointing payrolls data "could lead to weakness on the
equity markets and push more people towards gold," said Citi's
Thurtell.
PLATINUM HITS 3-MTH HIGH
Meanwhile platinum climbed more than 2 percent after a
positive session in Asia, boosted by bargain hunting and a
resurgence of fears falling prices may impact supply.
Spot platinum <XPT=> rose through the $1,000 an ounce level
for the first time since October 15 to reach a session high of
$1,000.50 an ounce. It was later quoted at $988/993 an ounce, up
from $965.50 an ounce late in New York on Tuesday.
The precious metal's resilience to the ailing car market has
boosted hopes its price slide may be at an end, analysts said.
Platinum held steady through most of December, after bad
news from carmakers knocked prices down more than 60 percent
from their March 2008 highs of $2,290 an ounce.
But with those demand fears now factored into prices, any
positive news from the car sector is being seized upon as a
reason to buy at lower prices.
"So much of the auto story is now factored in," said Tom
Kendall, precious metals strategist at Mitsubishi. "And things
are starting to look a bit more positive -- GM said this morning
it may not need to go back to the government for more cash."
"We have also seen quite a bit of incremental (production)
capacity taken out from the platinum sector," he added. "That is
certainly part of what is playing into the positive sentiment
for platinum right now."
Prices had already climbed in Asia as buyers stocked up on
the metal ahead of the Chinese New Year, encouraged by the
weaker yen and technical factors.
Among other precious metals, spot palladium <XPD=> edged up
to $197.50/202.50 an ounce from $196, while spot silver eased to
$11.34/11.42 an ounce from $11.44.
(Editing by James Jukwey)
