* Dollar weakens against euro as U.S. equities gain
* Oil tumbles below $47 per barrel
* Traders look forward to economic indicators this week.
(Recasts, updates with quotes, market activity, closing
prices, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Dec 2 (Reuters) - Gold ended about 1
percent higher on Tuesday on a weaker dollar and stronger
equities performance, but bullion could still sell off further
in the near term on the back of the weak stock market.
"Stronger climate in stocks and stronger energies in early
sessions are pushing gold higher," said Zachary Oxman, senior
trader at Wisdom Financial.
The Dow Jones industrial average was up 1 percent in
afternoon trade, after rising as much as over 3 percent
following a nearly 700 point drop on Monday. []
Spot gold <XAU=> was at $779.20 at 2:05 p.m. (1905 GMT), up
1.1 percent from Monday's close of $770.60 an ounce.
U.S. gold futures for February delivery <GCG9> settled up
$6.50 at $783.30 an ounce on the COMEX division of the New York
Mercantile Exchange.
Wolfgang Wrzesniok-Rossbach, head of sales at precious
metals group Heraeus, said that the main reason that gold rose
was because of the strength of the euro-dollar.
"The outlook from here really depends on the leading
indicators, as well as oil and the dollar," he said.
Tumbling oil prices pressured the precious metal, which is
often bought as a hedge against oil-led inflation.
Oil and most other commodities turned lower, and
broad-based Reuters/Jefferies CRB commodity index <.CRB>
dropped about 2 percent.
The dollar, the other main external driver of gold, also
turned supportive for the precious metal, dropping against the
euro and a basket of currencies as a rebound in the equity
markets cheered investors in other assets. []
REUTERS PRECIOUS METALS POLL
Prices of precious metals platinum, palladium and silver,
which have significant industrial uses, were expected to slump
next year as demand sags in line with economic growth, a
Reuters survey showed.
A poll of a dozen analysts showed 2009 gold forecasts down
9 percent to $849 an ounce. []
Investors were awaiting a spate of key data due out later
this week, culminating in U.S. nonfarm payrolls numbers on
Friday, and interest rate decisions from central banks
including the ECB, for signs as to the next direction of
trade.
"Investors should adopt a cautious strategy today and
monitor credit market developments," said Standard Bank analyst
Manqoba Madinane.
Elsewhere, imports of gold into India -- the world's
largest bullion market -- slipped in November to around 35-40
tonnes from 54 tonnes a year ago, the Bombay Bullion
Association said. []
Among other precious metals, silver <XAG=> was at $9.49 an
ounce, 2.5 percent higher than its Monday close of $9.26.
Platinum recovered slightly after falling sharply on Monday
in the wake of weak Japanese car sales data.
"Sentiment remains nervous with concerns surrounding
negotiations on a bailout for U.S. automakers this week," said
Barclays Capital in a note.
Platinum and palladium are sensitive to a downturn in car
demand, as they are chiefly used as components in catalytic
converters.
Spot platinum <XPT=> was at $796.50 an ounce, up 0.8
percent from its previous finish of $790.50 an ounce late in
New York on Friday, while its sister metal palladium <XPD=> was
at $169.50, 1.2 percent lower than Monday's late quote of
$171.50.
(Editing by Marguerita Choy)
