* Dollar pares gains vs currency basket, Bernanke eyed
* Largest gold ETF reports fresh 2.13-tonne outflow
(Updates prices)
By Jan Harvey
LONDON, July 22 (Reuters) - Gold prices steadied on
Wednesday as the dollar gave up gains against a basket of
currencies, though it remained under pressure as physical demand
for the precious metal stayed weak.
The world's largest gold exchange-traded fund recorded a
further outflow on Tuesday. The fund, New York's SPDR Gold Trust
<GLD>, has sold nearly 39 tonnes of gold in the last four weeks,
equal to almost 3.5 percent of its total holdings. []
Spot gold <XAU=> was at $947.00 an ounce at 1214 GMT, from
$948.15 an ounce late in New York on Tuesday. U.S. gold futures
for August delivery <GCQ9> on the COMEX division of the New York
Mercantile Exchange wre flat at $946.90 an ounce.
Standard Bank analyst Walter de Wet said $960 an ounce was
proving to be a major resistance level for gold prices."I would
look towards the dollar for any major moves in gold," he said.
"Our view for currencies is that the euro will reach $1.50
towards the end of the year. If that is going to be the case, I
don't think $960 is going to hold as a strong resistance."
Gold last stood above $960 in early June.
The dollar <.DXY> gave up gains versus a basket of six major
currencies on Wednesday, with traders awaiting the contination
of Ben Bernanke's testimony on the U.S economic outlook to
policymakers later in the session. []
A weaker dollar supports commodities priced in the U.S.
unit, such as gold, as it makes them cheaper for holders of
other currencies.
Oil also slipped on Wednesday, falling below $65 a barrel,
as a surprise rise in U.S. crude stocks pressured prices, while
base metals also eased. [] []
On other markets, European shares dipped, breaking a seven
day winning run, and U.S. stock futures also fell after
disappointing quarterly results from financial heavyweights
Morgan Stanley <MS.N> and Wells Fargo <WFC.N>. [] []
SOFT DEMAND
Physical demand for gold remained soft, with a 2.13 tonne
outflow from the SPDR ETF.
Jewellery demand in India, the world's largest gold
consumer, remained slack as buyers awaited lower prices, while
jewellers in Thailand cashed in their bullion on Wednesday after
prices broke through $950 an ounce.
Ronald Leung, director of Lee Cheong Gold Dealers in Hong
Kong, said buying had been muted since gold's rise to five-week
highs earlier this week. "Maybe people think the stock market is
more attractive," he said. []
Among other precious metals, silver <XAG=> was at $13.43 an
ounce against $13.54, platinum <XPT=> was at $1,161.50 an ounce
from, $1,169, and palladium <XPD=> was at $251 against $253.50.
Impala Platinum <IMPJ.J>, the world's number two platinum
miner, closed three shafts and part of another at its Rustenburg
mine in South Africa after an accident killed nine workers.
[]
"The National Union of Mineworkers is calling for Implat's
entire operations to be shut down and investigated," said
Fairfax analyst John Meyer in a note.
"Should industrial action follow, then there could be some
impact to platinum prices due to supply disruptions."
Elsewhere in South Africa, gold producers raised their pay
offer for miners on Tuesday, averting possible strike action for
now, according to the mineworkers' union. []
South Africa was the world's number three gold miner in 2008
after China and the United States, metals consultancy GFMS said.
(Reporting by Jan Harvey; Editing by Keiron Henderson)
