* Gold price rally loses steam as dollar strengthens further
* Markets await Trichet comments after ECB rates decision
* Platinum, palladium succumb to profit taking after highs
(Updates prices)
By Jan Harvey
LONDON, April 8 (Reuters) - Gold steadied in Europe on
Thursday near the near three-month highs it hit in the previous
session, as the dollar's rise versus the euro capped gains in
the precious metal.
Spot gold <XAU=> was bid at $1,145.80 an ounce at 1105 GMT,
against $1,147.00 late in New York on Wednesday. U.S. gold
futures for June delivery <GCM0> on the COMEX division of the
New York Mercantile Exchange eased $6.40 to $1,146.60.
Prices have climbed more than 2 percent so far this week
despite strength in the dollar, as persistent fears over the
fiscal health of smaller euro zone economies prompted investors
to buy the metal as a haven from financial risk.
"There were two things at play -- renewed concerns about
Greece coincided with physical buying," said Andrey Kryuchenkov,
an analyst at VTB Capital. "Greece concerns are still very
strong."
The market is awaiting a statement from European Central
Bank president Jean-Claude Trichet after the ECB's decision on
interest rates later in the day, he said.
"(Also) the dollar will come back into the picture, and the
dollar is looking better than ever," he added.
The euro fell on Thursday, approaching this year's low
against the dollar, on concerns about Greece's precarious fiscal
health. Investors are also awaiting a European Central Bank
policy decision at 1145 GMT, and accompanying comments. []
Buying driven by fears over the euro zone's fiscal issues
has so far counteracted euro weakness, which would normally have
been a powerful downward force on gold. However, persistent
strength in the dollar is likely to weigh on prices in future,
analysts said.
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OIL DECLINES
Among other commodities, oil declined for a second day on
Thursday towards $85 a barrel, pressured by a stronger dollar
and a rise in U.S. crude stockpiles to their highest level in
nearly 10 months. []
Meanwhile world shares fell ahead of meetings of the
European Central Bank and the Bank of England, and as worries
about Greece's financial stability intensified. []
On the investment side of the gold market, the world's
largest gold exchange-traded fund, New York's SPDR Gold Trust
<GLD>, said its holdings rose 0.914 tonnes on Wednesday to
1,130.737 tonnes, their highest since December. []
On the supply side, South Africa, a major producer of the
precious metal, said its output fell 9.2 percent in volume terms
in February compared to the same month of the previous year.
[]
Among other precious metals, platinum and palladium prices
retreated after hitting their highest in 20 months and two years
respectively in the last session, as investors cashed in gains.
"Initial gains in platinum have been since been reversed as
profit taking emerges," said James Moore, an analyst at
TheBullionDesk.com.
"However, we expect both to remain underpinned by increasing
investment and industrial demand and look to target $1,750/$525
in the coming sessions."
Platinum <XPT=> was at $1,697 an ounce against $1,700.50,
while palladium <XPD=> was at $497.50 against $506. Silver
<XAG=> was bid at $17.95 an ounce against $18.11.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
