* Equity markets weaken, dollar softens, oil falls
* Platinum, palladium, silver all decline along with gold
* Coming up: U.S. PMI, consumer confidence, home price data
(Updates throughout, changes dateline, pvs TOKYO)
By Jan Harvey
LONDON, Aug 31 (Reuters) - Gold eased in Europe on Tuesday
as a rally that took the precious metal to two-month highs last
week ran out of steam, but ongoing concerns over the health of
the financial markets supported prices near $1,235 an ounce.
The metal is still on track to post its biggest monthly
percentage gain since April in August, after a raft of soft U.S.
economic data lifted its appeal as a haven from risk.
Spot gold <XAU=> was bid at $1,233.85 an ounce at 1001 GMT,
against $1,236.66 late in New York on Monday. U.S. gold futures
for December delivery <GCZ0> fell $3.50 an ounce to $1,235.70.
Gold hit a high of $1,244.00 an ounce last week after
lacklustre U.S. data knocked confidence in the economic recovery
and pressured assets seen as higher risk such as stocks and
industrial commodities.
While the precious metal is consolidating after its recent
run higher, the chances are high for gold to rise above its
current all-time high of $1,264.90 an ounce later this year,
analysts said.
"We are lacking momentum at the moment," said Credit Suisse
analyst Tom Kendall. "Looking through to September and beyond,
we expect to see new highs in dollar terms. But short term, we
have to consolidate."
He said a revival in physical demand for gold and flows into
exchange-traded funds, central bank interest, persistently low
bond yields and a more neutral positioning in Comex futures were
all constructive for the precious metal.
Risk aversion remained elevated on Monday, with equity
markets falling on Tuesday on concerns that the U.S. economy is
sliding back into recession. European shares fell in early trade
and are on track to end the month lower. []
Stock index futures also pointed to a lower opening on Wall
Street. The yen held near a 15-year peak against the dollar as
traders shrugged off the Bank of Japan's recent policy easing,
while the euro firmed a touch versus the U.S. currency. []
OIL, BASE METALS FALL
Among commodities, oil prices fell around 1.5 percent to
below $74 a barrel, hurt by expectations that crude inventories
would rise, reflecting lower demand from the United States. Base
metals also slipped. [] []
Financial markets are awaiting key U.S. payrolls data for
August due on Friday. U.S. data releases are being closely eyed
for further signs of weakness in the economic recovery, with any
fresh risk aversion seen potentially pressuring higher-risk
assets and lifting gold.
"Ahead of the labour market data, today's releases will also
garner some interest, with Chicago PMI, U.S. consumer confidence
and house prices the main numbers," said Credit Agricole in a
note.
Among other precious metals, silver <XAG=> also eased,
giving up some of the gains that took it to a two-month high of
$19.32 last week. The metal dipped to $18.90 from $18.96.
Platinum <XPT=> was at $1,507 an ounce against $1,525.20,
while palladium <XPD=> was at $485.10 against $493.93.
The auto-catalyst metals have come under pressure from
concerns weakness in economic growth will weigh on demand for
raw materials. However, they are sensitive to supply threats,
especially platinum.
"Platinum has been in a range between $1,500-$1,600 a troy
ounce since the end of May," Commerzbank said in a note. "Should
the current strike of public workers in South Africa spread to
the mining companies, this could give prices fresh tailwind."
(Reporting by Jan Harvey; Editing by Jane Baird)
