* Technical support for gold fails above $1,130/oz
* Dollar retreats versus the euro as risk appetite sharpens
* Palladium retreats from last week's two-year high
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 8 (Reuters) - Gold fell 1 percent in Europe on
Monday as the market's failure to hold key psychological support
just above $1,130 an ounce disappointed investors, prompting
further selling of the precious metal.
Other precious metals also lost ground, with autocatalyst
material palladium, platinum and silver paring earlier gains.
Spot gold <XAU=> touched a low of $1,121.75 an ounce and was
bid at $1,123.75 an ounce at 1545 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 fell $11.50 to
$1,123.70 an ounce.
"(Gold) has been threatening this since the end of last
week," said Simon Weeks, head of precious metals at the Bank of
Nova Scotia.
"It ran out of steam on currencies, and in a thin market
with bullish comments about growth around, gold is feeling a bit
heavy. I expect it to come back to the 100-day moving average
around $1,112."
The precious metal rose in earlier trade after last week's
above-forecast U.S. jobs data boosted hopes for an economic
recovery and increased investors' willingness to take on risk.
This benefited higher-yielding currencies, such as the euro,
at the expense of the dollar <EUR=>. 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.
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 PARES GAINS
Crude prices also pared gains after earlier 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 had firmed last week, 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, but
retreated along with gold to $469 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," HSBC analyst James Steel said
in a note.
Among other precious metals, platinum <XPT=> was bid at
$1,584 an ounce against $1,569.50, having earlier tracked
palladium higher to a 6-1/2 week high of $1,607 an ounce. Silver
<XAG=> was bid at $17.22 an ounce against $17.32.
(Reporting by Jan Harvey; Editing by Anthony Barker)
