* Dollar firms as caution hits currency markets
* Uptick in equities cap gains
(Updates prices)
By Jan Harvey
LONDON, April 14 (Reuters) - Gold edged higher in Europe on
Tuesday, as caution ahead of a spate of U.S. corporate results
supported safe-haven buying, but gains were capped by a rise in
equity markets after strong earnings from Goldman Sachs.
Spot gold <XAU=> rose to $895.65/896.65 an ounce at 1129 GMT
from $892.05 late in New York on Monday.
"There are perhaps still some doubts over whether earnings
will be good," said Citi analyst David Thurtell. "There are
still some people who are very pessimistic, and who look at gold
below $900 and think...this is a bargain."
He said, however, that he did not share the view that gold
prices were consolidating before another rally. "I think gold
will slowly bleed lower as equities pick up gradually from
here."
The metal has lost ground as equity markets firmed and
traders switched out of gold to move back into stocks and
shares.
Stocks climbed to a two-month high in Europe, with
financials firming after a strong earnings report from Goldman
Sachs <GS.N>. []
But on the currency markets, the dollar rose as investors
remained cautious ahead of a string of U.S. earnings reports.
A stronger dollar typically pressures gold, which is often
bought as an alternative to the currency, but both assets have
recently been reacting chiefly to risk aversion. []
Holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, were unchanged on Monday from
the level reached last Thursday. []
Although the fund's holdings are at a record, it has seen
inflows of only 70.86 tonnes in the last month, against 185.7
tonnes in the month of February, according to the SPDR website.
UBS said in a research note that holdings of the nine ETFs
it tracks were unchanged on April 9 at 52.8 million ounces.
"The surge in equity markets and signs of a better
performance by U.S. banks may be calming some investors' fears,
but the fundamentals of gold are looking a lot more attractive
at current levels around $900 an ounce," it said.
"Scrap supply remains very low and although jewellery
demand is currently light, the signs of life in the jewellery
market when gold was on its recent lows are reassuring."
AUSPICIOUS
While jewellery demand has suffered from high and volatile
prices, traders hope buying will pick up ahead of India's
Akshaya Tritya festival on April 27, an auspicious time to buy
gold, and as the wedding season gets underway in Turkey.
Platinum also softened after hitting a six-month high on
Monday on expectations for firm investment demand after news
last week that London's ETF Securities had filed to register
ETFs backed by platinum and palladium in the United States.
The news sparked a 4 percent rise platinum last week, while
palladium climbed almost 7 percent. According to Commerzbank,
palladium is now eroding major resistance at $229-239 an ounce.
"Platinum and palladium prices are likely to push higher
going forward, supported by increased investor demand and
tightening supply/demand balances," said HSBC in a note.
Worries over the future of U.S. carmaker General Motors
<GM.N> failed to pressure platinum, about four-fifths of which
is bought by the car industry for use in autocatalysts. Analysts
say bad news from the car industry was priced in.
Platinum <XPT=> was at $1,222/1,232 an ounce from $1,236.50
in New York late on Monday, while palladium <XPD=> was bid at
$237.50 an ounce from $237.
Among other precious metals, silver <XAG=> eased a touch to
$12.65/12.72 an ounce from $12.71.
(Reporting by Jan Harvey; Editing by William Hardy)
