* Dollar lifts from 2-1/2 month low vs euro
* Oil prices slip below $39 a barrel
* SPDR Gold Trust bullion holdings rise to record
(Recasts, updates prices, adds comment)
By Jan Harvey
LONDON, Dec 18 (Reuters) - Gold eased a touch on Thursday as
the dollar recovered from lows against the euro and oil prices
fell more than $1 to below $39 a barrel.
Investor interest in the precious metal remains robust,
however, with bullion holdings of the world's largest
exchange-traded fund, the SPDR Gold Trust, rising to a record.
Spot gold <XAU=> was quoted at $861.70/863.70 an ounce at
1430 GMT, down from $866.90 in New York late on Wednesday, when
prices rose to a two-month peak of $881.20.
"The short-term prescription is to watch the dollar," said
Jon Nadler, senior analyst at Kitco Bullion Dealers in Montreal.
The precious metal slipped from highs as the dollar
recovered some lost ground against the euro, having earlier
touched a 2-1/2 month low against the single currency.
[]
The dollar has suffered 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, also
undermined interest in the precious metal.
U.S. crude futures fell to below $39 a barrel as a widely
anticipated output cut from OPEC on Wednesday failed to offset
fears over falling demand. []
Analysts expect gold to consolidate after recent sharp
gains. 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," BNP Paribas analyst Michael Widmer said. "A gold price
movement of the size of yesterday would be surprising."
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 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.
Platinum and palladium were little changed as the market
digested more bad news from the car industry, the main consumer
of both metals.
U.S. carmaker Chrysler said it would halt its factory
operations for at least a month, putting new pressure on the
government to help automakers. []
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 $861.50/863.50 an ounce from
$863.50, while palladium <XPD=> was at $176/181 from $175.50.
Silver <XAG=> was at $11.13/11.21 an ounce from $11.37.
(Reporting by Jan Harvey; Editing by Sue Thomas)
