* Gold retreats from highs as rising dollar weighs
* Euro-priced bullion hits record as single currency slips
* Palladium at 2-yr highs, platinum at firmest in 20 months
(Updates prices)
By Jan Harvey
LONDON, April 7 (Reuters) - Gold steadied in Europe on
Wednesday, retreating after hitting a record high in euro terms,
as the rising dollar offset buying linked to fear-driven
diversification into hard assets like bullion.
Dealers reported good physical gold buying from major
markets like India in recent sessions, which also supported
prices. Other precious metals also rose, with palladium hitting
a two-year high and platinum its strongest price in 20 months.
Spot gold <XAU=> was bid at $1,134.95 an ounce at 1109 GMT,
against $1,133.20 late in New York on Tuesday. U.S. gold futures
for June delivery <GCM0> on the COMEX division of the New York
Mercantile Exchange eased 10 cents to $1,135.90 an ounce.
"Yesterday good demand from India for physical (gold)
continued," said Afshin Nabavi, head of trading at MKS Finance.
"We are currently flirting with important resistance in
dollar terms. Should we be able to take out the $1,145-1,150
area, we should be ready for a big move towards the $1,200
level."
Traders report Indian jewellers are stocking up as the
wedding season begins in the world's largest gold consumer.
[]
Jitters over the outlook for the euro zone also resurfaced
amid uncertainty over a proposed Greek aid deal, following a
media report that Greece wanted to renegotiate a joint EU-IMF
aid deal reached last month. []
The euro's resulting slide towards a one-week low versus the
dollar would typically depress gold prices, but it has also led
some investors out of the single currency and into gold. []
"Gold still has to conquer resistance around $1,146 to
confirm a break from its current broad trading range," said
James Moore, an analyst at TheBullionDesk.com.
"However, increasing concerns over fiscal deficit levels
continue to draw diversification towards hard assets,
particularly gold."
Nonetheless, the stronger dollar did take some of the wind
out of gold's sails, pulling prices off a high of $1,138.20 hit
in earlier trade.
PLATINUM, PALLADIUM CLIMB
Euro-priced gold <XAUEUR=R> also came off the record high of
851.92 euros an ounce established earlier, and was later bid at
849.96 euros against 846.04 euros late on Tuesday.
Gold prices are also being supported by expectations
interest rates will remain low for an extended period, which
will keep the opportunity cost of holding gold low.
Minutes from the U.S. Federal Reserve's last meeting
released on Tuesday suggested the bank could keep interest rates
ultra-low for even longer than investors expect if the economic
outlook worsens or inflation drops. []
Among other commodities, platinum group metals also
benefited from expectations for an economic recovery, with
dealers reporting good demand for palladium in particular from
Japanese carmakers.
Platinum and palladium are primarily used in catalytic
convters, but both have also seen significant investment
interest this year, especially since the launch of new
exchange-traded products backed by these metals in New York.
Platinum <XPT=> hit its highest since August 2008 at $1,723
an ounce and was later at $1,712.50 an ounce against $1,697.50.
Palladium <XPD=> hit a two-year high at $511.50 and was later at
$508 against $504.50.
"Palladium, platinum and silver actually have been gaining
on gradually improving fundamentals alongside other industrial
metals," said VTB Capital analyst Andrey Kryuchenkov in a note.
Elsewhere silver <XAG=> was at $17.96 an ounce versus
$17.88.
(Reporting by Jan Harvey; Editing by Amanda Cooper)
