PRECIOUS-Gold steadies as dollar restricts gains

                                
 * Stronger dollar offsets boost from consumer demand
                                
 * Silver, pgms also under pressure
                                
 * China GDP, inflation data due Jan 20
                                
 
                                
 (Updates with comment, refreshes prices)
                                
 By Amanda Cooper
                                
 LONDON, Jan 17 (Reuters) - Gold held at around $1,360 an
ounce on Monday, stabilising after posting a second successive
weekly fall last week, as a stronger dollar tempered some of the
gains made from consumer demand for bullion.
                                
 The gold price has retreated by more than 4 percent since
the start of the year, driven lower by declining investment,
renewed optimism over the U.S. economic outlook and a more
robust dollar, which undercuts gold's appeal to non-U.S. buyers.
                                
 Holdings of gold in the world's largest bullion-backed
exchange-traded fund fell to their lowest since June 3 on
Monday, while speculators cut their holdings of U.S. gold
futures to their lowest since April 2010 last week. [GOL/SPDR]
<0#CFTC>
                                
 Spot gold <XAU=> was last little changed on the day at
$1,359.95 by 1430 GMT, having touched a one-week low of
$1,354.99 on Friday and having fallen by more than U.S. gold
futures <GCG1> which were down 0.1 percent at $1,359.70.
                                
 With world stocks hovering at around 28-month peaks, coal
prices rising after floods in major miner Australia and U.S.
crude oil futures <CLc1> around their highest in over two years,
gold has been sidelined in favour of more risk-linked assets.
                                
 "There's been far more interest going on in things like
coal, in food and even in the base metals," said Peter Hillyard,
director, commodity sales at ANZ.
                                
 "Gold's been a laggard compared to the others and I think
the investor community has very little going on in gold and has
switched its attention to other commodities."
                                
 
                                
 NO HELP FROM EURO
                                
 The euro fell broadly on Monday as hopes faded for an
immediate top-up to the euro zone's bailout fund and investors
assessed a recent rise in interest rate expectations. [FRX/]
                                
 The dollar edged up against a basket of currencies <.DXY>,
although traders said a public holiday in the United States
would likely restrict liquidity in the European afternoon.
                                
 Economic conditions in the U.S. and Europe and the gyrations
of the foreign exchange market, where gold's inverse correlation
to the dollar weakend for a third consecutive day, will be a
more decisive factor behind gold prices, some analysts said.
                                
 "If you take a three to 12-month view, it will still be at
higher (price) levels, but in the short term, gold is going to
find it difficult to rally," said Standard Bank analyst Walter
de Wet.
                                
 "We have seen the dollar depreciate last week and gold
hasn't really reacted to that, but consolidation is certainly
our view and we see physical demand on price dips below $1,360,
which should support gold," he said.
                                
 A raft of data from China, including inflation and economic
growth are due on Thursday and could shed some light on how
vigourously policy-makers will have to adjust rates. [COM/WEEK]
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 Physical demand for gold stayed robust ahead of the Lunar
New Year celebrations in early February, and bargain hunting
materialised in the Asian market after prices dropped and spot
supply remained tight, dealers said.
                                
 But the combination of a stronger dollar, weaker investment
interest and rising bond yields, especially in the United
States, have undermined some of the positive sentiment that
resurfaced late last year towards gold.
                                
 "The market mood feels a lot more negative than the price
action so far. After all, gold remains just $70 from its
all-time highs," wrote UBS strategist Edel Tully.
                                
 "And as last week ended, gold's previous negative
correlation to the dollar entirely broke down, with gold and the
dollar falling together."
                                
 With gold looking more fragile, silver also came under
pressure, falling for a third day in a row, by nearly 1 percent
to its lowest in a month.
                                
 Spot silver <XAG=> was last at $28.22 an ounce, compared
with $28.42 late in New York on Friday.
                                
 Platinum <XPT=> came under pressure, declining by 0.7
percent to $1,797.15 an ounce, but remained within 1 percent of
last week's 30-month high at $1,826.74.
                                
 Palladium <XPD=> was down around 0.5 percent at $789.47 an
ounce, having risen last week to its highest in 10 years.
 (Editing by James Jukwey)