* Oil, base metals decline after Monday bounce
* Stock markets slip in Asia, Europe
* Softer dollar limits losses in gold
(Recasts, adds comment, changes dateline, pvs TOKYO)
By Jan Harvey
LONDON, Nov 11 (Reuters) - Gold dipped in Europe on Tuesday,
as a downturn in the stock markets and commodities such as oil
and industrial metals weighed on prices.
However, the softer dollar helped to limit losses.
Prices are likely to consolidate in the short term, analysts
said, with the market eyeing the outcome of this weekend's G20
summit in Washington, where world leaders will discuss the
financial crisis.
Spot gold <XAU=> was at $739.50/741.50 an ounce at 1053 GMT,
little changed from $745.75 late in New York on Monday, when it
rose as much as 3 percent.
"Gold (climbed) yesterday on the back of everything else,
but those supportive factors have turned negative," said Simon
Weeks, head of precious metals at the Bank of Nova Scotia.
"Oil came down, stock markets came down, commodities came
down, and gold came with them," he added. "But overall, we
expect it to outperform everything else in the longer term."
Oil and industrial metals prices slipped, with U.S. crude
futures falling over $2 a barrel to erase the previous session's
gains. []
The softer dollar is lending some support to gold, which is
often bought as an alternative investment to the U.S. currency
and tends to move in the opposite direction to it.
The euro rose against the dollar after data from the ZEW
Institute showed an improvement in German economic sentiment,
although a slip in European shares is keeping a lid on gains.
[]
The FTSEurofirst 300 <> extended losses, tracking
falls in Asia and on Wall Street, with fears over the prospect
of a global recession outweighing the optimism sparked by a near
$600 billion stimulus package announced by China last weekend.
"Uncertainty remains, blocking investment fund flows into
precious metals and resulting in many investors opting for the
sidelines," said Standard Bank analyst Walter de Wet.
INDIAN DEMAND FIRM
Physical demand for the precious metals remains firm,
traders say. India's gold demand moved higher as retail buyers
bought for the wedding season, which began earlier this month.
[]
"On a scale of one to ten, based on what we are seeing or
can observe, we would place current jewellery demand at a 6 or
7, not a bad score considering the weakness in the global
economy," said UBS analyst John Reade in a note.
Platinum prices slipped a touch after climbing on Monday as
traders hoped the Chinese stimulus package could lead to a
recovery in demand for the more industrial precious metals.
Platinum and palladium prices have tumbled in recent months
as traders fretted over the outlook for demand from carmakers,
who consume around half of the world's platinum group metals.
Stillwater Mining said on Monday its full-year 2008
production is likely to be still lower than its most recent
forecast of 515,000-525,000 ounces, which it had already cut
from an initial estimate of 550,000-565,000. []
The company said due to falling metals prices it recognises
it needs to adjust its operations to conserve cash. Stillwater,
a unit of Russia's Norilsk Nickel <GMKN.MM>, is the only
significant producer of PGMs outside South Africa and Russia.
Spot platinum <XPT=> was quoted at $831/851 an ounce, down
from $847 late in New York on Monday. Palladium <XPD=> was at
$218/226 an ounce from $.
Among other precious metals, silver <XAG=> slipped to
$9.98/10.06 an ounce from $10.18.
(Reporting by Jan Harvey; editing by David Evans)
