* Dollar recovers from 8-week low versus the euro
* Palladium hits 7-week high; platinum near 6-week peak
* South Africa's mining union reaches wage deal
(Adds detail, comment; updates prices)
By Jan Harvey and Martina Fuchs
LONDON, July 28 (Reuters) - Gold slipped in Europe on
Tuesday as the dollar recovered losses against the euro, with a
downturn in equity markets in Europe and stock futures in the
United States knocking appetite for riskier assets.
Platinum and palladium held near multi-week highs, however,
as cautious optimism over the demand outlook boosted interest in
the autocatalyst materials.
Spot gold <XAU=> was bid at $949.20 an ounce at 1242 GMT,
against $952.65 an ounce late in New York on Monday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange fell $4.10 to $949.30 an ounce.
The dollar recovered after hitting an eight-week low against
the euro <EUR=> and its weakest this year versus a currency
basket <.DXY> as a slide in the equity markets after weak
company results dented risk appetite. [] [] []
"Gold has been tracking the U.S. dollar," said Citigroup
analyst David Thurtell. "I suspect that quite a large stop was
triggered just below the $952 mark."
Gold, like other dollar-priced commodities, becomes cheaper
for holders of other currencies as the U.S. unit weakens. Crude
prices also snapped a nine-day winning run to slip down, denting
interest in gold as a hedge against oil-led inflation. []
Gold prices remain within a $945-960 range for a sixth
straight session, however, as investors stick to the sidelines
during the seasonally weak summer period.
According to analyst Walter de Wet at Standard Bank, the
longer gold remains confined to its current range, the greater
the possibility of it eventually breaking lower.
"At these levels the bias is the downside for gold," he
said. "It is going to be tough for gold to move higher."
In supply news, the South African mineworkers' union told
Reuters it had accepted the latest wage offers from gold and
coal companies, averting a strike in the mining sector. South
Africa is the world's third biggest gold producer. []
PALLADIUM HIGH
The smaller platinum group metals (PGMs), palladium and
rhodium, performed strongly on Tuesday after platinum hit a
six-week high on Monday.
Palladium <XPD=> climbed to a seven-week high of $263 an
ounce on Tuesday, tracking platinum higher, while rhodium
<RHOD-LON> rose another $75 to $1,675 an ounce.
"Palladium has been the underperformer of the major PGMs
over last 12 months. But there has been buying alongside the
rises we have seen in platinum and gold over the last two to
three weeks," Rory McVeigh, a PGM trader at Commerzbank, said.
All three metals, primarily used in the auto industry as
components in catalytic converters, have suffered from a fall in
car demand over the last year.
But McVeigh said there were tentative signs of recovery.
"Carmakers are beginning to see light at the end of the
tunnel and begin to look at 2010/11 when they will be needing
this metal again," he said.
Platinum <XPT=> was at $1,212.50 an ounce against $1,215,
while palladium was at $261 against $259. Silver <XAG=> was at
$13.96 an ounce versus $14.01, having earlier matched the
previous session's four-week high of $14.08.
(Reporting by Jan Harvey and Martina Fuchs; Editing by William
Hardy)
