* Dollar ticks up after U.S. jobs data but gains short-lived
* Financial markets eye outcome of EU meeting on debt crisis
* SPDR gold ETF sees further outflow on Wednesday
(Updates prices, adds comment)
By Jan Harvey
LONDON, Dec 16 (Reuters) - Gold retreated on Thursday as a
brief recovery in the dollar after data showed U.S. jobless
claims fell for a second week took the wind out of the metal's
sails, but concern over euro zone debt levels limited losses.
The euro quickly recovered lost ground against the dollar as
investors focused attention on an EU summit later in the day, at
which leaders are trying to agree on further action to tackle
the region's debt crisis.
Spot gold <XAU=> was bid at $1,374.05 an ounce at 1429 GMT,
against $1,380.45 late in New York on Wednesday. Earlier it rose
as high as $1,386.35 an ounce. U.S. gold futures for February
delivery <GCG1> fell $11.90 to $1,374.30.
"I don't think we will see a sharp decline in gold prices,"
said Commerzbank strategist Daniel Briesemann. "The fundamental
data and especially the debt crisis in the euro zone and its
peripheral countries is too severe to be too optimistic."
The dollar briefly rose against a basket of currencies
<.DXY> after the jobless numbers, but failed to sustain gains
after home construction data showed the sector remains stressed
even as the economy shows signs of a pick-up. []
The single currency <EUR=> is up 0.2 percent on the day
versus the dollar but is still down nearly 7.5 percent so far
this year after concerns over debt hit Ireland and Greece, and
threatened to spread to Portugal and Spain.
At a summit on Thursday EU leaders will discuss changing the
bloc's treaty to create a permanent crisis-resolution mechanism
from 2013, and may look at enlarging their existing crisis fund.
[]
EU officials are conscious that any failure to take decisive
action could be interpreted as weakness, with the threat of
further bond market fallout early next year. []
While gold typically moves in the same direction as the euro
in the short term, jitters over the stability of the euro zone
have helped lift the metal to a record $1,430.95 an ounce as
investors bought it as a safe store of value.
PRO-ACTIVE
Richcomm Global Services senior analyst Pradeep Unni said
that while few surprises were expected from today's summit, "the
market seems grasping to the fact that euro zone members are
attempting to be more pro-active to yet another debt surprise".
"Though fundamentally the euro is weak, this pro-activeness
is adding to the gains in euro," he said. "Gold may have to
succumb to year-end profit-taking and laggardness, but the trend
still seems to be pointing higher with a possibility of new
highs being scaled as we step into the New Year."
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, eased by another 0.6
tonnes on Wednesday, bringing their total outflows in December
to date to 0.4 tonnes versus inflows of just over 7 tonnes in
the same period of 2009. []
In India, the world's largest consumer of the precious
metal, gold buying slowed as the wedding season neared its end,
shrugging off the impact of a firmer rupee, which makes
dollar-priced gold cheaper for local buyers. []
"Demand is slightly thin," said a Mumbai-based dealer. "They
would hardly come to buy until mid-January."
Elsewhere silver <XAG=> was bid at $28.82 an ounce against
$28.79, platinum <XPT=> was at $1,695.74 an ounce against
$1,695.50 and palladium <XPD=> at $739.22 against $746.72.
Among other commodities, oil and most base metals prices
eased amid nervousness ahead of the EU meeting. [] []
New investments in U.S. commodity products and mutual funds
hit three-month highs in November, Lipper data showed on
Wednesday, while regulators mulled ways to limit excessive
speculation in the sector. []
(Additional reporting by Amanda Cooper; Editing by Alison
Birrane)
