* Dollar retreats versus the euro as risk appetite sharpens
* U.S. data, easing fears over Greece boost appeal of risk
* Palladium holds near last week's two-year high
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 8 (Reuters) - Gold prices firmed in Europe on
Monday as the dollar retreated against the euro, with risk
appetite sharpened by last week's firmer-than-expected U.S. jobs
data and concerns over Greece's fiscal health retreating.
Palladium, which is primarily used in catalytic converters,
held near the two-year high of $480 an ounce it hit at the end
of last week on expectations demand will rise, after strong car
sales data from the United States and China cheered investors.
Spot gold <XAU=> was bid at $1,135.10 an ounce at 1332 GMT,
against $1,133.80 late in New York on Friday. U.S. gold futures
for April delivery <GCJ0> on the COMEX division of the New York
Mercantile Exchange rose 30 cents to $1,135.50 an ounce.
Last week's above-forecast U.S. jobs data boosted hopes for
a global economic recovery, increasing investors' willingness to
take on risk and benefiting higher-yielding currencies, such as
the euro, at the expense of the dollar <EUR=>.
"Gold is trading completely with the dollar," said VTB
Capital analyst Andrey Kryuchenkov. "The twenty-day rolling
(correlation) is significant and I think that will continue...
especially because at the start of the week there is very little
data."
Weakness in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Concern over the fiscal health of debt-laden Greece and
other peripheral euro zone economies weighed heavily on the euro
last week, pushing the single currency to 9-1/2 month lows
versus the dollar. However, those fears are now receding.
French President Nicolas Sarkozy promised on Sunday that
euro zone countries would help Greece if its financial problems
worsened. []
Currency speculators cut their long bets on the dollar by
more than half in the latest week, according to Commodity
Futures Trading Commission data released on Friday
OIL RISES
Other commodities also benefited from the better risk
sentiment, with crude prices rallying to eight-week highs above
$82 a barrel on the weaker dollar and signs of an economic
recovery in top oil consumer the United States. []
Investment demand for gold firmed, with holdings of the
world's largest gold-backed exchange-traded fund, the SPDR Gold
Trust <GLD>, rising 0.609 tonnes on Friday. []
However, jewellers in Asia sold back some of their holdings
on Monday to take advantage of higher prices, while gold bars
were offered at a discount for the first time in two months in
Tokyo. []
On the supply side, the world's number three gold miner
Anglogold Ashanti <ANGJ.J> said the company hopes to unwind its
hedgebook sooner than its previous target of 2014, and forecast
a steady increase in output. []
Palladium <XPD=> rose as high as $477 an ounce, close to the
two-year high of $480 an ounce it hit late last week, and was
later at $475 against $471.
Robust auto sales figures in the major gasoline car markets
China and the United States lifted prices last week. While
diesel autocatalysts use a heavier loading of platinum than
palladium, petrol catalysts are more palladium-intensive.
"It is the relatively better demand for gasoline fuelled
autos and background concerns over Russian stock levels that is
supporting the palladium rally," said HSBC analyst James Steel
in a note.
Among other precious metals, platinum <XPT=> tracked
palladium higher to a 6-1/2 week high of $1,607 an ounce. It was
later at $1,604 an ounce against $1,569.50, while silver <XAG=>
was bid at $17.44 an ounce against $17.32.
(Reporting by Jan Harvey; Editing by William Hardy)
