* Stocks edge higher in Europe, but gold holds firm
* Euro slips versus the dollar, breaking technical support
* Ratio of gold to silver, platinum hits highest since June
(Updates prices, adds comment)
By Jan Harvey
LONDON, Aug 23 (Reuters) - Gold prices eased a touch on
Monday as the dollar firmed against the euro, but uncertainty
over the outlook for the global economy continued to support
investment in the metal as a safe store of value.
Spot gold <XAU=> was bid at $1,225.35 an ounce at 1518 GMT,
against $1,226.95 late in New York on Friday. U.S. gold futures
for December delivery <GCZ0> fell $1.80 to $1,227.00.
The precious metal rallied to a 1-1/2 month high at
$1,237.15 an ounce last week after a spate of lacklustre U.S.
data knocked confidence in the economic recovery, boosting
interest in the metal as a haven from risk.
"All the signs are that for the U.S. economy, the fast part
of the recovery is over, and it is now making modest gains. The
gains are simply not enough to reduce unemployment," said
Citigroup analyst David Thurtell.
"There are concerns about the flow-on that will have on the
equity markets, so that is helping gold," he said. "There are
also more signs, perhaps, that the Fed will have to do some more
quantitative easing."
Investment demand for gold has increased in recent sessions,
with holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, rising by nearly 13 tonnes last
week, its biggest one-week climb since early June. []
Commerzbank noted that data from the Commodity Futures
Trading Commission showed a fourth consecutive weekly rise in
speculative net long positions in New York gold futures in the
week to Aug. 17.
"At 18,600 contracts or 11.7 percent, the rise was even
sharper than before in this reviewed period," it said. "Net long
positions of 177,000 contracts is also the highest level since
the start of July."
"This shows that financial investors have been a major force
in this recent rally of gold prices," it added.
DOLLAR FIRMS
The dollar rose 0.4 percent versus the euro <EUR=> on Monday
as the single currency was hurt by concerns over the euro zone
economy and prospects of loose monetary policy until year-end.
[]
Strength in the U.S. unit usually weighs on gold, as it
curbs the metal's appeal as an alternative asset and makes
dollar-priced commodities more expensive for holders of other
currencies.
European shares bounced back from one-month lows as more
merger and acquisition news improved sentiment, while U.S.
stocks were broadly flat. [] []
High prices weighed on jewellery demand in major gold
consumer India. Dealers in Mumbai reported a retreat in
wholesale gold demand as stockists awaited a fall in prices.
[]
Silver <XAG=> was at $17.97 an ounce against $17.98.
Platinum <XPT=> was at $1,506 an ounce against $1,506.50 and
palladium <XPD=> at $477.50 against $473.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on the relative price performance of gold compared
to platinum and silver: http://r.reuters.com/rew56n
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Gold has become increasingly expensive compared with the
industrial precious metals in recent weeks as concerns over the
outlook for economic growth have increased. The ratio of gold to
platinum and silver has risen to its highest since early June.
(Reporting by Jan Harvey; Editing by Sue Thomas)
