* Gold prices await direction from currency markets
* Indian gold demand abates as prices rise above $1,040/oz
* Silver ETF reports 131-tonne inflow
(Updates prices)
By Jan Harvey
LONDON, Oct 30 (Reuters) - Gold prices drifted down to just
above $1,040 per ounce in Europe on Friday as the dollar edged
higher, with investors eyeing U.S. data due later in the day for
fresh direction.
Gold moves in a close inverse relationship with the dollar,
as the metal becomes cheaper for holders of other currencies
when the U.S. unit weakens.
Spot gold was bid at $1,042.65 an ounce at 1231 GMT, against
$1,044.95 late in New York on Thursday. U.S. gold futures for
December delivery <GCZ9> on the COMEX division of the New York
Mercantile Exchange fell $3.70 to $1,043.40 an ounce.
"At the moment, the metal and the dollar are moving in line
with equities, so it is worth keeping an eye on stocks later
today when U.S. data is due," said Alexander Zumpfe, precious
metals trader at Heraeus.
The euro-dollar rate has moved in recent sessions in line
with risk appetite, with the U.S. currency tending to benefit
from falling share prices.
Several U.S. data releases are expected on Friday, including
Chicago manufacturing figures at 1345 GMT and the
Reuters/University of Michigan Surveys October final consumer
sentiment index at 1355 GMT.
The dollar recovered on Friday from its declines the
previous day on the back of solid U.S. growth figures, while the
Swiss franc fell sharply on market jitters of suspected
intervention. [] []
RESILIENCE
Stronger-than-expected third-quarter gross domestic product
data boosted stocks and commodities on Thursday, helping lift
gold. Traders say the metal's resilience after its slip below
$1,030 an ounce has boosted confidence.
"The chart looks favorable after yesterday's move to within
$1.10 an ounce of key support from the Sept. 17 high at
$1,025.80," said MF Global in a note.
The light physical demand for gold that emerged in major
consumer India after the metal retreated from record highs
earlier this week is abating, dealers said, as prices resumed
their rise. []
Traders in India said more buying would be seen if the metal
retreated to $1,020 an ounce, or 15,800 rupees per ten grams.
Elsewhere holdings of the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Trust <GLD>, were
unchanged on Thursday after three sessions of declines.
[]
On the supply side, Harmony Gold Mining <HARJ.J>, the
world's fifth largest gold producer, said that due to the
strength of the rand, it may have to consider restructuring some
of its lowest-grade, highest-cost operations. []
Among other precious metals, spot silver <XAG=> was bid at
$16.50, against $16.63 an ounce late on Thursday.
The world's largest silver ETF, the iShares Silver Trust in
New York, said it saw an inflow of 131.43 tonnes on Thursday.
[]
As well as strong investment buying, traders say they are
also seeing a pick-up in industrial demand for silver. The metal
is primarily industrial in application, and is widely used in
electronics manufacturing.
Platinum <XPT=> was at $1,318.50 an ounce against $1,337.50,
while palladium <XPD=> was at $322.50 against $325.50.
(Reporting by Jan Harvey; Editing by Nigel Hunt)
