* ETF buyers target gold after price slip
* Euro off two-month high after Irish govt party withdrawal
* Silver ETF sees biggest 1-day outflow since late Nov.
(Updates prices, adds comment)
By Jan Harvey
LONDON, Jan 24 (Reuters) - Gold prices rose on Monday as
lower prices attracted some buyers back to the market after the
metal's third consecutive weekly loss, but a more optimistic
view of global growth still limited fresh investment.
A dearth of safe-haven demand in recent weeks as concerns
over euro zone sovereign debt and the U.S. economic outlook
receded meant gold struggled to make fresh headway after hitting
a record $1,430.95 an ounce in December, analysts said.
Spot gold <XAU=> was bid at $1,344.95 an ounce at 1415 GMT,
against $1,342.25 late in New York on Friday. U.S. gold futures
for February delivery <GCG1> rose $3.40 an ounce to $1,344.40.
The precious metal fell 1.4 percent last week to its lowest
since late November as a spate of firmer-than-expected economic
data, primarily from the United States, boosted interest in
assets seen as higher risk at gold's expense.
Gold exchange-traded funds saw outflows as investors cashed
in some of last year's gains. While that trend reversed late
last week as prices fell, VTB Capital analyst Andrey Kryuchenkov
said, the sustainability of this buying is questionable.
"(ETF holdings) could stabilise here, but I don't think many
more bargain hunters will rush to the market," he said.
Holdings of the largest gold-backed ETF, the SPDR Gold Trust
<GLD>, rose by more than 20 tonnes on Friday. However, they are
still down some 9 tonnes this year. []
Bargain hunting helped gold shrug off gains in the dollar,
which usually weigh on prices. Strength in the U.S. unit curbs
gold's appeal as an alternative asset and makes dollar-priced
commodities more expensive for holders of other currencies.
The euro backed off a two-month high against the dollar,
with political turmoil in Ireland highlighting uncertainties
facing heavily indebted euro zone countries. []
Ireland's junior coalition party withdrew from Prime
Minister Brian Cowen's government on Sunday, signalling the end
of a crisis-riddled administration and hastening an election due
on March 11. [] []
SPECULATIVE POSITIONS DROP
Data released Friday by the Commodity Futures Trading
Commission showed a third successive drop in the net speculative
position in gold, bringing the net non-commercial long to its
lowest since the week of July 26, 2009.
"We have got a pretty robust macro backdrop despite some
potential for European sovereign issues," said RBS analyst
Daniel Major. "Our economists aren't in the camp that that is
going to derail global growth and the global risk story."
"The safe-haven argument, which was the dominant theme last
year, is unlikely to be repeated this year," he said. "We have
already seen slowing interest in exchange-traded funds."
"In the near term there seems to be good physical buying in
China and India on price weakness and that is providing a bit of
support around the $1,350 level, but certainly the Western
investment story has started to wane somewhat."
The data CFTC data also showed the silver speculative
position rose last week by about 1.3 percent, partially
offsetting the previous week's fall, while the platinum net
non-commercial position staged its largest weekly rise in at
least four years.
Platinum <XPT=> was at $1,817.26 an ounce against $1,824.00,
while palladium <XPD=> was at $812.47 against $819.75. Silver
<XAG=> was bid at $27.19 an ounce against $27.47.
Holdings of the world's largest silver ETF, the iShares
Silver Trust <SLV>, fell by 181 tonnes on Friday, their biggest
one-day outflow since late November.
They are down by more than 527 tonnes since the beginning of
the year, worth some $468 million at today's prices.
(Additional reporting by Amanda Cooper; Editing by Alison
Birrane)
