* Gold prices extend gains above 100-day moving average
* Dollar wilts after retail sales numbers miss expectations
* Chinese inflation data comes in softer than forecast
* Palladium hits fresh 10-year high at $847/oz
(Updates prices)
By Amanda Cooper and Jan Harvey
LONDON, Feb 15 (Reuters) - Gold rose to a near four-week
high on Tuesday and was on track for its biggest one-day climb
in a week as the dollar extended losses after soft U.S. retail
sales numbers and the market digested Chinese inflation data.
Spot gold <XAU=> rose as high as $1,376.50 an ounce and was
bid at $1,373.01 an ounce at 1602 GMT, against $1,361.67 late in
New York on Monday. U.S. gold futures for April delivery <GCJ1>
rose $8.40 an ounce to $1,373.50.
The precious metal is on track for a third week of gains,
recovering from the losses it made in January, when rising
appetite for risk fuelled buying of higher-yielding assets.
"Some risk aversion has returned -- some euro zone jitters
with WestLB and ECB buying of Portuguese bonds last week, and
the unsettled Middle Eastern situation," said Credit Agricole
analyst Robin Bhar.
"For me though, (the move in gold) is more technical. We
have moved above the 100-day moving average at $1,365, which has
capped gains until now."
A softer dollar also underpinned the precious metal,
although the usual inverse relationship between the two assets
has recently been soft. The dollar extended losses against the
euro after U.S. retail sales data missed expectations. []
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For a chart of the gold/dollar index correlation
http://link.reuters.com/jup97r
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Data released earlier showed Chinese inflation at a
lower-than-expected 4.9 percent in January, curbing expectations
for further rate rises from China's central bank. Lower interest
rates tend to support gold buying.
The Asian giant also changed the way it calculates the
numbers by reshuffling the basket of prices measured, giving
more weight to housing and less to food.
"On the face of it, it's a good number, but when you look at
the detail and what they have done to the basket, you might
think it was going to come in lower anyway," said Bhar.
"Probably for gold this is bullish because inflation is
running higher than this rejigged (data) is showing."
PRESSURE EASES
Some pressure has also come off gold after outflows from
exchange-traded funds backed by the precious metal petered out.
Holdings of the largest gold ETF, New York's SPDR Gold Shares
<GLD>, have held steady for the last three sessions.
ETF Securities, a provider of exchange-traded funds backed
by physical metal, and asset manager BlackRock <BLK.N> estimate
investors pulled just over $2 billion from commodity
exchange-traded products in January. []
Elsewhere, palladium rallied to a decade high at $847 an
ounce. Reduced expectations that China will tighten monetary
policy has supported industrial commodities such as platinum
group metals, which are chiefly used in catalytic converters.
"The international PGM market has come to expect a lot from
China. Without Chinese purchases, both platinum and palladium
would be trading at considerably lower levels," said UBS
precious metals strategist Edel Tully.
"Over the coming months, platinum has the potential to
appreciate faster than palladium if China's passenger car sales
soften on a monthly basis as we expect, while the investor
market for platinum grows."
Platinum <XPT=> was at $1,833.24 an ounce against $1,825.49,
while palladium <XPD=> was at $837.97 against $831.50.
Silver <XAG=> was bid at $30.78 an ounce against $30.59.
Holdings of the world's largest silver-backed ETF, New York's
iShares Silver Trust, rose 22.78 tonnes on Monday, their biggest
one-day rise since Jan. 24.
(Editing by Alison Birrane)
