* Dollar retreats 0.1 pct versus the euro
* Inflation concerns in UK, emerging markets mount
* Coming up: U.S. January PPI data, 1330 GMT
(Releads, updates prices)
By Jan Harvey
LONDON, Feb 16 (Reuters) - Gold steadied on Wednesday ahead
of a raft of U.S. data due later, having earlier risen to
four-week highs as a retreat in the dollar and concerns over the
medium-term inflation outlook helped support the precious metal.
Spot gold <XAU=> hit a peak of $1,377.65 an ounce and was
bid at $1,371.55 an ounce at 1222 GMT, against $1,372.95 late in
New York on Tuesday. U.S. gold futures for April delivery <GCJ1>
fell $1.50 an ounce to $1,372.60.
The precious metal has climbed more than 3 percent so far
this month as the resurgent appetite for risk that boosted
interest in higher-yielding assets in January receded.
"In January we saw real interest rates, at least for long
maturities in the United States, rise quite a bit," said Tobias
Merath, head of commodities research at Credit Suisse. "Ten-year
yields went up, real rates went up and that prompted some profit
taking."
"Now yields are a bit more stable and inflation expectations
are more to the forefront, and that is why gold prices have
stabilised." Gold's usual inverse relationship with the dollar
was also returning as economic conditions normalised, he added.
The dollar was down 0.1 percent against the euro <EUR=>. Its
recovery from earlier lows has also kept a lid on gains in
dollar-priced gold. []
Dollar watchers are now awaiting a raft of U.S. data due
later in the session for direction, with January producer price
index and housing starts numbers due at 1330 GMT and industrial
production reading out at 1415 GMT.
"Today's PPI data could well give further clues as to the
inflationary pressures building in the U.S. economy, after
yesterday's import price data came in nearly double expectations
at 1.5 percent," said CMC Markets analyst Michael Hewson.
The Federal Open Market Committee will also release minutes
of its Jan. 25-26 meeting on monetary policy.
ETF OUTFLOWS STEADY
Gold prices are also taking some support from ongoing
tensions in the Middle East, and from a reduction in outflows
from physically backed exchange-traded funds, whose gold
holdings fell significantly in January.
Holdings of the largest, New York's SPDR Gold Trust <GLD>,
eased to a nine-month low on Tuesday, but outflows this month so
far are well below January's levels. []
"Easing investor ETF outflows after a substantial January
pullback helped to keep the new short-term uptrend intact," said
VTB Capital analyst Andrey Kryuchenkov in a note.
Demand in number one gold consumer India was light with many
buyers absent for a local holiday.
However, winter harvesting season, which is expected to
leave more disposable income with gold-buying rural households,
is underway, while marriage season has also started and will
last through May. []
Meanwhile, an Industrial and Commercial Bank of China
executive said Chinese demand for physical gold and gold-related
investments is growing at an "explosive" pace and is set to
remain robust amid inflation concerns. []
On the supply side of the market, African Barrick Gold
<ABGL.L> said it expects to produce 700,000-760,000 ounces of
gold in 2011, as it announced better-than-expected financial
results. []
Among other precious metals, silver <XAG=> was at $30.73 an
ounce against $30.76. Platinum <XPT=> was at $1,825.40 an ounce
against $1,827.24, while palladium <XPD=> was at $833.20 against
$835, having touched a 10-year high at $847 on Tuesday.
(Reporting by Jan Harvey; Editing by Alison Birrane)
