* Dollar steadies after hitting 2-1/2 month low vs euro
* Oil prices stabilise above $40 a barrel
* SPDR Gold Trust bullion holdings rise to record
(Recasts, adds detail, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Dec 18 (Reuters) - Gold rose in Europe on Thursday
as the dollar weakened, but remained rangebound, with analysts
expecting the metal to consolidate after recent sharp gains.
Investor interest in the precious metal remains robust, with
bullion holdings of the world's largest exchange-traded fund,
the SPDR Gold Trust, rising to a record level.
Spot gold <XAU=> was quoted at $876.60/878.60 an ounce at
0953 GMT, up from $866.90 late in New York on Wednesday, when
prices rose to a two-month peak of $881.20.
Prices have risen more than $130 an ounce month-on-month as
the dollar weakened against the euro.
"For the rest of the year, I think we will basically see
some consolidation of the gains we have seen in the last few
weeks," said BNP Paribas analyst Michael Widmer. "A gold price
movement of the size of yesterday would be suprising."
The precious metal was taking support from some fresh dollar
weakness, as the U.S. currency slipped to fresh 2-1/2 month lows
against the euro. []
The euro briefly trimmed gains after a weak reading of the
German business climate by the IFO research institute, but
remains firmer. []
The dollar has been suffering since the Federal Reserve
slashed interest rates to between zero and 0.25 percent on
Tuesday. A weaker U.S. currency supports gold, which is often
bought as an alternative investment to the dollar.
The other main external driver of gold, oil prices, were
little changed around $40 a barrel as the market digested an
output cut from OPEC on Wednesday. []
SPDR HITS RECORD
Investor demand for exposure to bullion prices through
exchange-traded funds, which issue securities backed by physical
gold, remained firm.
The world's largest gold-backed ETF, the SPDR Gold Trust
<GLD>, said its bullion holdings rose 6.1 tonnes or almost 1
percent on Dec 17 to a new record high. []
The trust, which issues securities backed by physical stocks
of gold, now holds 775.33 tonnes of bullion. Its holdings are up
17.5 tonnes or 2.3 percent week-on-week.
However, demand for small investment products such as coins
and bars has dipped in Europe from recent highs, traders say.
The market is looking ahead to economic data due out later
in the session for clues as to the next direction for gold.
"Watch out for the U.S. Philadelphia Fed Business outlook
and leading indicator indices later today -- negative statistics
are expected for both," said Standard Bank analyst Manqoba
Madinane.
"Worse-than-expected data should keep the greenback on the
back foot, which should also benefit precious metals."
Among other precious metals, platinum and palladium inched
up, tracking gains in gold, despite more bad news from the car
industry, the main consumer of both metals.
U.S. carmaker Chrysler said it will halt its factory
operations for at least a month, putting new pressure on the
government to help automakers. []
Goldman Sachs cut its global automotive production and sales
forecasts, citing a sharp decline in the operating environment.
[]
Meanwhile industry association ACEA said European new
commercial vehicle sales dropped a record 30.8 percent
year-on-year in November. []
Spot platinum <XPT=> climbed to $875/880 an ounce from
$863.50, while palladium <XPD=> was at $178.50/183.50 from
$175.50. Silver <XAG=> was at $11.40/11.48 an ounce from $11.37.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
