* Precious metals hit 1-week highs as dollar slides
* Commods, equities buoyed by rising risk appetite after Fed
(Adds comment, details, updates prices)
By Jan Harvey and Martina Fuchs
LONDON, Aug 13 (Reuters) - Gold rose above $960 an ounce in
Europe on Thursday for the first time since Aug 7 as the dollar
weakened to a six-day low against the euro and oil prices
climbed, helping lift other precious metals to a week highs.
Comments from the Federal Reserve on Wednesday that the U.S.
recession may be nearing an end have boosted the appeal of
assets seen as riskier, such as commodities, equities and
higher-yielding currencies, analysts said.
Spot gold <XAU=> was bid at $957.45 an ounce at 1126 GMT,
against $946.05 an ounce late in New York on Wednesday. Earlier
it hit a peak of $960.10.
U.S. gold futures for December delivery <GCZ9> on the COMEX
division of the New York Mercantile Exchange rose $7.10 to
$959.60 an ounce.
Societe Generale analyst David Wilson said the rise had been
caused by "the re-weakening of the dollar, which has been a key
driver for gold for quite a while now, after the Fed's
announcement."
The U.S. currency slipped to a one-week low versus the euro
after the euro zone's two biggest economies, France and Germany,
posted suprise returns to growth in the second quarter. []
The dollar was already easing as investors moved into
nominally higher-risk assets after the Fed said in a statement
accompanying its decision to hold rates near zero on Tuesday
that the U.S. economy was levelling out. []
The comments sparked a rise in commodity prices and
equities, with oil rising more than 2 percent and base metals
surging across the board. [] []
European shares were also boosted by the statement, and
economic data from the euro zone, while U.S. stock index futures
rose to session highs, pointing to a firm opening on Wall
Street. [] []
DEMAND SOFT
Demand for physical gold from exchange-traded funds was
soft, however, with holdings of the largest, New York's SPDR
Gold Trust <GLD>, flat for a second day on Wednesday. []
"The most important demand driver from the investment side
for the gold ETF is non-existent," said Commerzbank analyst
Eugen Weinberg. "The ETF has been experiencing outflows
recently, so this is not a dynamic component.
"The most dynamic one is the positioning of the speculators
on the COMEX (futures exchange), and this is probably mostly
based on the outlook for the U.S. dollar," he said.
The Fed's view that the economy is improving is likely to
support gold, as investors worried about the inflationary
implications of growth buy the precious metal as a hedge.
"Gold should remain supported by the inflationary impact of
the Fed's rate decision, in addition to the boost to general
risk sentiment," said James Moore, an analyst at TheBullionDesk.
Other precious metals also hit one-week highs. Silver <XAG=>
was at $14.97 an ounce against $14.51, platinum <XPT=> was at
$1,264.50 an ounce against $1,238, and palladium <XPD=> was at
$275.50 against $270.
"We are seeing again the dollar weakening and platinum
prices moving up a little bit alongside gold," said Commerzbank
platinum group metals trader Rory McVeigh.
He said however he did not expect the upward move to be
sustained. "It's a thin market at the moment, so people will buy
into rallies and then sell off accordingly within those areas of
$1,250 and $1,280," he said.
(Reporting by Jan Harvey and Martina Fuchs; Editing by Peter
Blackburn)
