* Crude climbs for fourth straight session on storm fears
* Physical demand for coins, bars remains firm
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 28 (Reuters) - Gold prices climbed in Europe on
Thursday, tracking oil higher and supported by a recovery in the
euro against the dollar.
Strong physical demand after gold's recent sharp price fall
also helped keep prices over $830 an ounce, although the
precious metal is struggling to overcome technical resistance to
break much higher.
Gold <XAU=> firmed to $832.30/833.30 an ounce at 0953 GMT
from $826.05/827.45 an ounce late in New York on Wednesday,
having hit an intraday high of $836.40 an ounce.
Crude prices climbed for a fourth straight session, boosting
interest in gold as a hedge against oil-led inflation.
"Oil at $118-119 a barrel is still extremely expensive and
is still very much an inflationary pressure in the market, which
is certainly supportive of gold," said Simon Weeks, director of
precious metals at the Bank of Nova Scotia.
Crude is taking support from fears that Tropical Storm
Gustav may hit the Gulf of Mexico, seat of a number of key U.S.
oil installations, after it morphs into a major hurricane.
[]
A bounce in the euro against the dollar as expectations for
a euro zone rate hike fall is also boosting interest in gold,
which is often bought as a hedge against dollar weakness.
The euro rose further from a six-month low it hit against
the dollar on Tuesday, after European Central Bank policymakers
including board member Axel Weber played down expectations of a
cut. []
"Mr Weber's remarks highlight the risk that the financial
markets may be premature in anticipating a more accommodative
turn in ECB policy," said HSBC precious metals analyst James
Steel.
"A reassessment of ECB policy may support the euro and by
extension gold prices," he added.
Investors awaited U.S. economic data due out later in the
session, including second-quarter corporate profits and
preliminary GDP numbers, for clues on the direction of trade.
PHYSICAL DEMAND STRONG
Investor demand for coins and bars and expectations of
increased jewellery buying going into the peak-demand autumn
festive season in Asia are also supporting gold prices.
India's Titan Industries <TITN.BO>, which operates one of
the country's largest jewellery chains, told Reuters on Thursday
that it expects the recent revival in gold demand to continue if
prices remain around current levels. []
Silver <XAG=> tracked gold higher to $13.72/13.77 an ounce
from $13.49/13.55 an ounce late in New York on Wednesday.
Among other precious metals, spot platinum <XPT=> edged up
to $1,445.50/1,465.50 an ounce from $1,434.00/1,454.00 late in
New York, while palladium <XPD=> climbed to $292.00/300.00 an
ounce from $288.50/296.50 an ounce.
JP Morgan said in a report on Wednesday it cut its 2008
platinum price forecast by 10 percent to $1,698 an ounce and its
2009 forecast by 10 percent to $1,488, in response to massive
falls seen in platinum group metals prices in recent weeks.
The bank also slashed its 2009 palladium price forecast by
26 percent to $338. In a note this morning it added that it has
cut its rhodium price outlook by 60 percent.
Both metals have suffered from expectations car demand will
slow as the global economy falters, cutting demand for the PGMs
as components in autocatalysts.
Toyota Motor Corp <7203.T> cut its 2009 vehicle sales
forecast by nearly 7 percent on Wednesday due to a downturn in
western markets driven by high fuel prices and the credit
crunch. []
(Reporting by Jan Harvey; editing by Christopher Johnson)
