* Dollar slips ahead of U.S. economic data
* Oil prices climb on fears storm will hit production
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 27 (Reuters) - Gold prices rose in Europe on
Wednesday, tracking gains in oil, as the dollar retreated from
the six-month high it hit in the previous session.
Traders are awaiting a spate of U.S. and European economic
data due out later in the day for its impact on the currency
markets, and consequently on gold. The U.S. will also release
its weekly oil inventory report, which could impact crude.
Gold <XAU=> rose to $830.20/831.20 an ounce at 0840 GMT from
$822.90/824.30 an ounce late in New York on Tuesday.
"The euro has gained back some value, and it seems the
dollar may have been a little overbought yesterday -- that is
why gold has gained," said Afshin Nabavi, head of trading at MKS
Finance in Switzerland.
"We have (U.S. July) durable goods orders coming out of the
States later today, and the oil inventories as well, so it is
going to be a busy and volatile afternoon," he added.
The dollar slipped against the euro on Wednesday, giving up
more of the gains that took it to a six-month high against the
single currency on Tuesday. []
A weaker dollar typically benefits gold, which is often
bought as a hedge against weakness in the U.S. currency.
In the longer term global economic deterioration is expected
to support the dollar, as the Federal Reserve is likely to hold
rates while other key central banks are expected to cut.
This should keep a lid on gains in gold, analysts said.
Oil rose as fears grew tropical storm Gustav could affect
U.S. oil operations in the Gulf of Mexico. []
Gold tends to track crude prices higher, as the precious
metal can be bought as a hedge against oil-led inflation.
Traders will be closely eyeing key U.S. oil stockpile data
due for release at 1435 GMT for its effects on the crude market.
However, it is the dollar-euro exchange rate that is most
likely to dictate trade on Wednesday, brokers said.
"Although oil prices should remain supported by concerns
over storm Gustav today, the greenback's movement against the
euro could take centre stage and set the tone for the commodity
complex," said Standard Bank analyst Manqoba Madinane.
"Precious metal prices could come under pressure today as
investors watch for a correction to the upside for the greenback
against the euro."
PLATINUM CLIMBS
Spot platinum meanwhile climbed 1.5 percent as traders took
advantage of a recent drop in prices to buy into the white
metal. Palladium also ticked up 2 percent.
Both metals have suffered from fears weaker economic growth
will cut car consumption, denting demand for the platinum group
metals as components in catalytic converters.
But after a sharp drop in prices throughout early August,
both metals are now bouncing back.
"The white metal... has rallied towards $1,440 this morning
following strong demand from Asian industrials," said
TheBullionDesk.com analyst James Moore.
Spot platinum <XPT=> rose to $1,430.50/1,450.00 an ounce from
$1,409.50/1,429.50 late in New York. Spot palladium <XPD=>
firmed to $287.00/295.00 an ounce from $282.00/290.00.
Silver <XAG=> rose to $13.72/13.77 an ounce from
$13.56/13.64 an ounce late in New York.
(Reporting by Jan Harvey; Editing by Michael Roddy)
