* Euro gives up gains vs the dollar as debt fears reemerge
* SPDR gold ETF sees first inflow of 2010
* Recovery from lows below $1,050/oz cheers chartists
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Feb 8 (Reuters) - Gold gave up gains that took it
above $1,070 an ounce in Europe on Monday, as the dollar's
recovery versus the euro dented the metal's appeal as an
alternative asset.
Spot gold <XAU=> was at $1,064.75 an ounce at 1347 GMT
versus $1,065.55 late in New York on Friday, having earlier
touched a high of $1,073.50.
In the last session it slid to $1,043.75, its lowest since
Nov. 2, as the euro fell on fears over the outlook for some euro
zone economies. Those fears re-emerged on Monday, pulling the
euro back from early highs and consequently knocking gold.
"We are probably not out of the woods yet," said Saxo Bank
senior manager Ole Hansen. "We are not ready to de-couple from
the dollar, so we continue to keep an eye on that."
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange rose $10.60 to
$1,062.80 an ounce.
A two-day meeting of the Group of Seven ministers and
central bank governors in northern Canada this weekend was
capped by reassurances about debt-strapped Greece and agreement
that banks should pay for future rescue funds. []
But dealers said investors were disappointed the meeting did
not result in concrete action to tackle sovereign debt issues in
countries such as Greece, Portugal and Spain.
Concern over the outlook for smaller euro zone economies was
a major driver of the sharp rise in risk aversion late last
week, which saw hefty selling of the euro and assets perceived
as higher risk, such as equities and commodities.
ETF HOLDINGS RISE
Gold's price drop prompted some fresh interest in the metal,
however, with the world's biggest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, reporting its first
inflow since December on Friday. []
"There has been a bit of bargain hunting," said Credit
Agricole analyst Robin Bhar. "We fell to nearly $1,040 on
Friday, so that has seen a bit of trade interest and investor
positioning emerging, which has given a boost to the market."
From a technical perspective, resistance near the $1,050
level held on Friday, preventing a move down towards the 200-day
moving average near $1,020 an ounce. A breach of this area would
lead to a sharper sell-off, analysts said. []
"Copper, WTI (U.S. crude futures) and gold have all come
down to look at the 200-day moving average, which is quite an
influential level," said Bhar.
"The 200-day and 100-day moving averages are often targeted
by longer-term players -- funds, hedge funds -- as an indicator
of whether to buy or sell, so that could be influential going
forward," he added.
For graphic showing key technical levels for gold, click on
http://graphics.thomsonreuters.com/gfx/NTrv_20100802144431.jpg.
Among other precious metals, silver <XAG=> slid to $14.95 an
ounce from $15.11 an ounce, platinum <XPT=> dipped to $1,474.50
an ounce from $1,479.50 and palladium <XPD=> eased to $400 from
$402.50.
While all precious metals are to an extent tied to the
dollar, platinum group metals' greater exposure to the economic
cycle means they could be better supported than gold.
"With the complex largely held hostage to EUR-USD movements,
the near-term outlook looks shaky," said Morgan Stanley in note.
"We do expect, however, platinum and palladium to continue to
outperform."
(Editing by Sue Thomas)
