* Equity markets recover after early losses, boosting gold
* Rising dollar keeps lid on gains
* Platinum group metals weighed by poor economic data
(Recasts; adds detail; changes dateline pvs SINGAPORE)
By Jan Harvey
LONDON, Dec 9 (Reuters) - Gold recovered early losses in
Europe on Tuesday, tracking moves in the equity markets, with a
firmer dollar versus the euro limiting gains in the precious
metal.
Bullion was lower in Asian trade, giving up some of the 2
percent gains it made on Monday, as world stocks slipped from a
three-week high and the dollar strengthened.
But the precious metal swung higher as equities recovered in
Europe. Spot gold <XAU=> was quoted at $773.70/775.70 an ounce
at 1023 GMT, up from $771.30 late in New York on Monday. Earlier
it touched a session low of $766.30.
"Gold is getting caught up in equity-related news and
economic news," said Simon Weeks, director of precious metals at
the Bank of Nova Scotia. "When people with baskets of
commodities are looking for cash, gold gets caught up in that
liquidation."
However, the strength in the dollar -- which posted hefty
losses on Monday -- against the euro is keeping up the pressure
on gold. The precious metal is often bought as an alternative
investment to the U.S. currency and moves in the opposite
direction to it.
The dollar rose versus the euro as risk appetite ebbed.
Investors are cautious over the outlook for the equity markets
and fear weakness in the global economy could be sustained.
[]
The other main external driver of gold, the price of oil,
was also steady on Tuesday at just under $44 a barrel.
The market is awaiting a demand report from the U.S. energy
department later in the session and the production meeting next
week of the Organization of the Petroleum Exporting Countries
(OPEC) for signs of the next direction of trade. []
Rising crude prices can boost confidence in commodities as
an asset class, and increase interest in gold as a hedge against
oil-led inflation.
On the physical side, jewellery buying in the world's main
bullion market, India, has been picking up during the wedding
season, and is also benefiting from demand for gold as a haven
from risk, dealers said.
"India is buying," said Beh Hsia Wah, a dealer at United
Overseas Bank in Singapore. "Most customers expect that gold
might hit $860."
PLATINUM WILTS
Among the other precious metals, platinum and palladium
slipped a touch as investors worried slowing economic activity
would hit demand for the metals, which are chiefly used to make
catalytic converters.
Economic news was weak on Tuesday. Data showed Japan's
economy contracted at a faster pace than anticipated in the
third quarter, Germany's trade deficit grew in October, and the
French trade deficit widened to a record in the same month.
[]
British industrial output fell at its sharpest pace in
nearly six years in October, and the third-quarter economic
contraction could be sharper than first thought. []
A survey from the Organisation for Economic Coperationa and
Development (OECD) said the U.S. economy will probably get worse
before it gets better. Weekly retail sales and chain store sales
data are due in the United States later in the session.
[]
Spot platinum <XPT=> eased to $811/831 an ounce from $821
late in New York on Monday, while palladium <XPD=> slipped to
$170/175 an ounce from $173.
"With Japanese GDP sliding deeper in the red and markets
anticipating poor... U.S. economic sentiment data, platinum
could come under pressure today," said Standard Bank analyst
Walter de Wet.
Spot silver <XAG=> was quoted at $10.02/10.10 an ounce
against $9.95.
(Editing by Karen Foster)
