* U.S. growth data disappoints markets, knocking stocks
* Gold still on track for worst monthly loss since December
* Palladium holds near highest since late June
(Updates prices, adds comment)
By Jan Harvey
LONDON, July 30 (Reuters) - Gold prices rose to session
highs above $1,175 an ounce in Europe on Friday after U.S.
growth data disappointed investors, knocking stock markets lower
and lifting bullion's appeal as a haven from risk.
But the metal is still down nearly 6 percent so far in July,
on track for its biggest monthly loss since December, having
slipped as concern over euro zone sovereign debt levels, which
sent the metal to a record $1,264.90 an ounce in June, receded.
Spot gold <XAU=> hit a high of $1,175.75 an ounce and was
bid at $1,171.30 an ounce at 1310 GMT, against $1,168.05 late in
New York on Thursday. U.S. gold futures for December delivery
<GCZ0> firmed $2.70 to $1,173.90.
Data released by the U.S. Commerce Department showed that
economic growth slowed in the second quarter to 2.4 percent,
after revised 3.7 percent growth rate in the first three months
of the year. []
While the data is not weak enough to provoke deep concerns
over the health of the U.S. economy, it does point to another
potentially supportive situation for gold, analysts said.
"The problems in the U.S. had moved completely to the
background, and they are starting to emerge now more and more,"
said Bank of America-Merrill Lynch analyst Michael Widmer.
"If you are getting into an environment where the Fed thinks
more about how it can support the economy through monetary
policy, for instance, you could see gold prices moving up."
The data prompted further losses in European stocks, which
fell more than 1 percent as appetite for assets seen as higher
risk waned. U.S. stock index futures also added to losses,
pointing to a lower opening on Wall Street. [] []
On the currency markets, the dollar fell to session lows
versus the yen and pared gains versus the euro in the wake of
the data. The dollar index, which measures the unit's
performance against six other currencies, was flat. []
Usually, weakness in the U.S. unit lifts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Confidence in the strength of U.S. growth was already
fragile, after St. Louis Fed president James Bullard said on
Thursday he is worried about the risks the U.S. might fall into
a Japan-style quagmire of falling prices and investment.
His comments helped lift gold in New York trade on Thursday.
COMMODITIES SOFTEN
Among other commodities, oil tumbled nearly 2 percent after
the data as investors focussed on a slowing economy and rising
inventories in top consumer the United States. Copper prices
slightly extended losses. [] []
From a technical perspective, gold is still looking
vulnerable to further losses after breaking through key support
at $1,175 an ounce earlier this week, analysts said.
"On a closing basis, support for gold still holds at $1,160,
as the metal's attempts past this point continue to bring buyers
into the market," said ScotiaMocatta in a note.
"This is encouraging as far as arresting the liquidation
goes, but without a break of downtrend resistance, currently
holding at $1,190, we see no reason to turn bullish on gold."
Among other precious metals, silver <XAG=> was bid at $17.86
an ounce against $17.59, while platinum <XPT=> was at $1,554.20
an ounce against $1,560.
Palladium <XPD=>, which rose more than 4 percent on Thursday
on options-related buying, hit its highest since June 22 at
$489.50 on Friday, and was later at $483.90 versus $485.28.
The metal, which is up 10 percent so far in July, is set for
its first monthly gain since April. The gold-palladium ratio --
the number of ounces of palladium needed to buy an ounce of gold
-- fell to 2.4 on Friday, its lowest since mid-May.
"We can understand why palladium and the commodity complex
have outperformed gold of late," said UBS analyst Edel Tully in
a note. "Quite simply, investors are seeking risk and for now
gold's safe haven properties have been made redundant."
(Reporting by Jan Harvey; Editing by Alison Birrane)
