* Dollar slips to near one-month low versus the euro
* Oil pares gains after earlier rising towards $83 a barrel
* South Africa slips to fourth place as world gold producer
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 12 (Reuters) - Gold steadied on Friday after
U.S. retail sales data sparked a brief retreat in the euro, with
investors disappointed by the metal's failure to break through
$1,120 an ounce selling despite the dollar's renewed weakness.
Prices rose in earlier trade as the euro's recovery versus
the dollar fuelled buying. However, a brief retreat in the
single currency after retail sales numbers sparked fresh
selling, pushing the metal through support at $1,115 an ounce.
Spot gold <XAU=> was bid at $1,109.00 an ounce at 1544 GMT,
against $1,109.30 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange rose $1.00 to $1,109.30 an ounce.
"We have broken the short term upward trend line and we are
currently seeing a pullback," said Peter Fertig, a consultant at
Quantitative Commodity Research.
"If we are to return to the short-term upward trend, it
would be positive. We still have a series of higher highs and
higher lows, which is also positive, but it will depend on
reaching last week's high and exceeding it."
The euro briefly pared gains after U.S. retail sales data
came in better than expected, but rose again to a near one-month
high versus the dollar amid reports a policy dove was a leading
candidate for vice chair of the U.S. Federal Reserve. []
Gold typically moves in the opposite direction to the
dollar, as weakness in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
But this traditionally strong relationship has weakened.
"The price of gold managed to stay above $1,100 an ounce
despite the stronger U.S. dollar," said Commerzbank in a note.
"This development illustrates that a strengthening U.S. dollar
must not necessarily lead to lower gold prices."
OIL CLIMBS
Oil pared gains after rising towards $83 a barrel, but was
poised for a second weekly increase amid expectations energy
demand would grow despite any efforts by China to tighten
monetary policy further on rising inflation. []
Demand for the exchange-traded funds backed by the precious
metal was soft, with holdings of the world's largest gold ETF,
New York's SPDR Gold Trust <GLD>, unchanged on Thursday from a
day before. []
Russia's central bank said it sold gold coins containing
2,300 ounces of the metal in January, an 85 percent slump
compared with 15,700 ounces a year earlier. []
In supply news, South Africa's Chamber of Mines said the
republic's gold production fell by 5.8 percent in 2009, pushing
it to the fourth-biggest producer after China, Australia and the
United States. []
Among other precious metals, silver <XAG=> was bid at $17.19
an ounce against $17.16. The world's largest silver ETF, the
iShares Silver Trust <SLV>, said its holdings fell 48.8 tonnes
from a day earlier to 9,302.58 tonnes on Thursday.
[]
Elsewhere platinum <XPT=> hit a seven-week high $1,623.50 an
ounce and was later bid at $1,616.50 against $1,609.50, while
palladium <XPD=> was at $462.50 against $458.
The metals have performed well this year as investors expect
industrial demand from carmakers to improve and investment
buying to rise. They are also closely eyeing supply of metals.
Among the minor precious metals, iridium <IRID-LON> rose to
a 12-year high on Friday, with traders reporting strong Asian
demand for the metal used in chemicals processing and
manufacturing electronics components. []
(Editing by Sue Thomas)
