* Dollar little changed vs currency basket, firmer vs euro
* Largest gold ETF reports fresh 2.13-tonne outflow
(Updates prices, adds comment)
By Jan Harvey
LONDON, July 22 (Reuters) - Gold held just under $950 an
ounce on Wednesday as the dollar steadied against a basket of
currencies with weakness in the euro underpinning prices, but
gains were capped by lack of physical demand for the metal.
A slide in oil prices is also undermining support for gold,
analysts said.
Spot gold <XAU=> was at $947.85 an ounce at 1402 GMT,
against $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 were up $1.30 at $948.20 an ounce.
"We are stuck in a range," said Afshin Nabavi, head of
trading at MKS Finance in Geneva. "We have to break below $944
or above $955 in order to see some interest in the market."
"With stocks opening lower and the euro not performing that
(well), gold could test the lower end of its range," he added.
The dollar <.DXY> was steady versus a basket of six major
currencies on Wednesday, with the euro declining and the yen
firming, as risk appetite worsened after a weak earnings report
from Morgan Stanley <MS.N>. []
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. U.S.
stock markets opened weaker, but soon pared losses. [] []
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.
SOFT DEMAND
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. []
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 hit 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 $13.52 an
ounce against $13.54, platinum <XPT=> was at $1,164.50 an ounce
from, $1,169, and palladium <XPD=> was at $254 against $253.50.
Impala Platinum <IMPJ.J>, the world's number two platinum
miner, closed parts of its Rustenburg mine in South Africa after
an accident killed nine workers. []
"The National Union of Mineworkers is calling for Implats'
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."
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 Peter Blackburn)
