* Gold rises on weak dollar, focuses on currency movements
* Gold's inflation appeal boosted as oil, Wall St rebound
* India's gold imports fall 68 percent in July
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 18 (Reuters) - Gold futures rebounded
on Tuesday as the dollar fell against the euro, and the inverse
relationship between bullion and the U.S. currency could
continue to strengthen in the near term.
On Monday, investors cast doubts about the nascent global
economic recovery, prompting them to sell riskier assets such
as stocks and commodities and to pile into a safe haven
including the greenback and U.S. Treasury bonds.
Miguel Perez-Santalla, vice president of sales at Heraeus
Precious Metals Management in New York, said that macroeconomic
sentiment has been highly related to the strength of the
dollar, which in turn affected gold's appeal as a hedge against
the falling greenback.
"The dollar is still the primary world currency at the
moment. You are always going to see a run to the dollar when
things are uncertain ... even if there is deflation and it
loses value," Perez-Santalla said.
Analysts noted that the inverse relationship between gold
and the dollar has been reasserting itself. Earlier this year,
the traditional link broke down because both assets benefited
from a flight to safety amid economic fears.
U.S. December gold futures <GCZ9> settled up $3.40 at
$939.20 an ounce on the COMEX division of the New York
Mercantile Exchange.
Spot gold <XAU=> was at $938.15 an ounce at 3:21 p.m. EDT
(1921 GMT), against $932.80 an ounce late in New York on
Monday.
"Precious metals are basically tracking the dollar," said
Citigroup analyst David Thurtell. The U.S. currency fell
against the euro after an unexpected gain in German's ZEW
economic sentiment index boosted optimism about the euro zone.
[]
Wall Street equities rose after better-than-expected
financial results from a string of U.S. corporate earnings,
supporting appetite for nominally higher-risk assets such as
commodities, which supported silver, platinum and palladium.
Bellwether commodity crude oil also rallied toward $70 a
barrel, a day after energy prices fell sharply. []
Gold often tracks crude prices, as it can be bought as a
hedge against oil-led inflation.
Physical demand for gold, however, lent little support.
Data showed India's gold imports fell 68 percent year-on-year
in July. India is traditionally the biggest gold consumer in
the world. []
SILVER VOLATILE
Among other precious metals, silver <XAG=>, which plummeted
more than 5 percent to session lows on Monday, was last at
$13.97 an ounce against $13.96. Because the white metal is a
smaller market than gold, silver's trading pattern is often
more volatile.
Platinum <XPT=> was at $1,228 an ounce against $1,220, and
palladium <XPD=> was at $270.50 against $265. Prices of the
metals used in autocatalysts fell on Monday but remained up 2
percent and 3 percent respectively this month.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCZ9> 939.20 3.40 0.4 884.30 6.2
US silver <SIU9> 13.960 -0.015 -0.1 11.295 23.6
US platinum <PLV9> 1232.10 9.50 0.8 941.50 30.9
US palladium <PAU9> 272.35 4.95 1.9 188.70 44.3
Prices at 3:21 p.m. EDT (1921 GMT)
Gold <XAU=> 938.15 5.35 0.6 878.200 6.8
Silver <XAG=> 13.97 0.01 0.1 11.30 23.6
Platinum <XPT=> 1228.00 8.00 0.7 924.50 32.8
Palladium <XPD=> 270.50 5.50 2.1 184.50 46.6
Gold Fix <XAUFIX=> 935.00 2.25 0.2 836.50 11.8
Silver Fix <XAGFIX=> 14.090 -0.040 -0.3 14.760 -4.5
Platinum Fix <XPTFIX=> 1221.00 0.00 0.0 1529.00 -20.1
Palladium Fix <XPDFIX=> 268.00 0.00 0.0 365.00 -26.6
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
