* Dollar regains lost ground against yen, euro
* SPDR gold ETF holdings decline another 5 tonnes
* Platinum, palladium at multi-month highs on ETP news
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 7 (Reuters) - Gold prices eased in Europe on
Thursday as the dollar rose against the euro, with investors
taking profits in commodities and higher-yielding currencies
after their recent gains.
Platinum and palladium prices hit multi-month highs,
meanwhile, after news that the first platinum- and
palladium-backed exchange-traded products will be launched in
the United States on Friday.
Spot gold <XAU=> was at $1,133.40 an ounce at 1546 GMT,
against $1,137.90 late on Wednesday. Prices climbed 4 percent in
the first three trading sessions of 2010 to a three-week high of
$1,140.20, but struggled for traction as the dollar recovered.
"There is still a lot of enthusiasm for commodities as an
asset class, and for precious metals and gold particularly,"
said Tom Kendall, precious metals strategist at Mitsubishi Corp.
"But it has got to work against some of the dollar strength
we have seen recently. That is going to act as a brake on the
market," he added.
In the short term, the dollar remains the main price driver.
The U.S. currency rose against the euro and yen on Thursday,
underpinned by weak German and euro zone data, and comments from
Japan's finance minister that he wanted the yen to weaken more.
[]
Strength in the dollar cuts gold's appeal as an alternative
asset and makes dollar-priced commodities more expensive for
holders of other currencies.
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange fell 0.2 percent to
$1,133.70 an ounce.
Commodity prices were pressured by news of tighter monetary
policy in China, a major consumer of industrial raw materials.
China's central bank surprised markets by raising the
interest rate on its three-month bills for the first time since
August, intensifying its grip on liquidity a day after it
promised to keep credit growth in check. []
Gold has lost the support it has taken in recent days from
strength in other commodities.
REPERCUSSIONS
"The continued driver (for commodities) from a fundamental
point of view is the emerging markets, especially China," said
Saxo Bank senior manager Ole Hansen.
"If there are any indications coming out that they are
trying to tighten up, it is bound to have some repercussions
across the commodities spectrum."
Oil prices fell back below $83 a barrel, pulling back from a
15-month high hit a day earlier, while copper prices fell from a
16-month peak. [] []
Further selling was seen from the world's largest gold
exchange-traded fund, the SPDR Gold Trust <GLD>, on Wednesday,
with its holdings down 4.876 tonnes. They have declined nearly
10 tonnes in the first three trading days of 2010. []
Among other precious metals, silver <XAG=> was bid at $18.30
an ounce against $18.18, while platinum <XPT=> was at $1,551.50
an ounce versus $1,555 and palladium <XPD=> at $425 versus $426.
Platinum matched the 16-month high it hit on Wednesday at
$1,561 and palladium reached its firmest since July 2008 at
$431.50 on news that new exchange-traded products backed by the
metals will be launched in the United States on Friday.
Stock exchange NYSE Euronext said the funds, operated by a
U.S. subsidiary of London's ETF Securities, will trade on the
NYSE Arca platform. []
Traders say the ETPs, which will issue securities backed by
physical stocks of the precious metals, could see significant
inflows of platinum and palladium on their launch.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
