* Gold climbs as dollar softens, oil ticks up
* Traders eye ECB meeting for impact on forex
* Platinum, palladium steady after turbulent trade
(Recasts, changes dateline, PVS SINGAPORE)
By Jan Harvey
LONDON, Aug 7 (Reuters) - Gold edged higher in Europe on
Thursday as the dollar softened against the euro ahead of a
rate-setting meeting of the European Central Bank later in the
session, and as oil prices rose.
Platinum steadied after a rise in prices fuelled by strike
action in South Africa on Wednesday ended a three-session slide
that drove prices down some $180 an ounce to six-month lows.
Gold <XAU=> edged up to $882.20/883.20 an ounce at 0939 GMT
from $878.70/879.90 late in New York. Earlier this week the
precious metal dropped to a seven-week low as part of a broader
commodities sell-off fuelled by a firmer dollar.
"We are seeing a slight strengthening in the euro versus the
U.S. dollar. That will keep the gold market above support
lines," said Saxo Bank analyst Philip Carlsson.
"We are also seeing a small turn in the crude market, which
is adding to this development."
Oil climbed more than $1 a barrel on Thursday as supply
concerns fuelled buying. Firmer crude prices usually benefit
gold, which can be bought to hedge against oil-led inflation.
[]
Carlsson warned, however, that both the crude and gold
markets remain vulnerable to further losses, and that any break
of support could result in a swift price move.
The dollar weakened broadly on Thursday, as oil prices
bounced back from three-month lows, prompting traders to take
profits. []
Gold typically moves in the opposite direction to the
dollar, as it is often used as a hedge against weakness in the
U.S. currency.
The euro firmed a touch against the U.S. currency ahead of
the ECB's rate-setting decision later in the session, and ECB
president Jean-Claude Trichet's accompanying press conference.
While the bank is widely expected to leave rates on hold at
4.25 percent, the markets will be focused on Trichet's comments
for clues as to future ECB policy.
"The ECB press conference could move markets and might have
an impact on gold via the (foreign exchange) market," said
Dresdner Kleinwort in a note.
"The ECB is still unlikely to ease its inflation rhetoric,
but might recognise the weaker than expected data flow," it
added.
PLATINUM STEADIES
Platinum steadied after Wednesday's price rise, which came
on the back of a South African strike and renewed confidence in
the sector sparked by Xstrata's <XTA.L> $10 billion bid for
Lonmin <LMI.L>.
Traders remain worried about the outlook for the car
industry, source of 50 percent of platinum demand, however.
"Reduced production of large U.S. SUVs could... reduce the
need for platinum where each SUV contains some 8-10 grams of
platinum in its catalysts," noted Fairfax analyst John Meyer.
The world's biggest carmaker, Toyota <7203.T>, reported a 28
percent drop in quarterly net profit on Thursday, which it
blamed in part on slumping U.S. sales. []
Spot platinum <XPT=> was steady at $1,594.50/1,614.50,
unchanged from its level late in New York on Wednesday.
Spot palladium <XPD=> edged up to $352.00/356.00 an ounce
from $349.50/357.50 late in New York. Silver <XAG=> climbed to
$16.60/16.65 an ounce from $16.51/16.57.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
