* Commodities, equities edge lower as U.S. data disappoints
* U.S. inflation data flat in July, consumer confidence down
* Silver hits 2-month high at $15.16 an ounce
(Adds comment, updates prices, details)
By Martina Fuchs
LONDON, Aug 14 (Reuters) - Gold turned lower in Europe on
Friday as the dollar recovered losses versus a basket of
currencies and as weak U.S. consumer confidence data for July
knocked oil and equity markets lower.
Spot gold <XAU=> was bid at $951.45 an ounce at 1457 GMT,
against $953.50 an ounce late in New York on Thursday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange fell $2.90 to $953.40.
"Industrial production in the U.S. disappointed, and the
U.S. stock markets are deep in the red. This is a bit negative,
and the falling stock markets have dragged gold lower," Peter
Fertig, a consultant at Quantitative Commodity Research, said.
"This indicates that the economy is not recovering as
quickly as some have thought," he added. "Investors have
increased their risk aversion (due to) the correction in the
stock market, and this is having an impact on the U.S. dollar."
The dollar <.DXY> rose against a currency basket after U.S.
data sparked fears over the scope of a U.S. recovery, with
risk-averse investors buying the U.S. unit as a haven. []
Gold typically moves in a close inverse relationship with
the U.S. currency, as it becomes cheaper for holders of other
currencies as the dollar weakens.
A survey by the University of Michigan showed U.S. consumer
confidence fell in early August as a growing number of Americans
fretted about the broader economy to improve. []
Crude prices were knocked more than 2 percent lower by the
data, while equities fell, as optimism over recovery prospects
was deflated. Gold often mirrors moves in commodities bellwether
oil. [] [] []
INFLATION FEARS
Earlier a government report showed U.S. consumer prices were
unchanged in July over June but fell over the past 12 months by
the most since 1950.
Gold is particularly sensitive to inflation data, as it is
also often bought as a hedge against rising consumer prices.
Standard Bank analyst Walter de Wet said the data showed little
inflationary pressure in the market.
"From an immediate perspective, there is little pressure on
gold price," he said. "The longer term expectations are still in
the market that inflation could rise, but clearly not in the
next couple of months."
On the demand side, the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Trust <GLD>, was flat
at 1,065.49 tonnes on Thursday, having seen an outflow of 29
tonnes in the last four weeks. []
Among other precious metals, silver <XAG=> was lifted to a
two-month high of $15.16 due to the rise in gold prices and a
sharp rally in copper in Asia overnight. []
It was later bid at $14.68 an ounce against $15.00.
Analysts said silver is benefiting from hopes the economic
downturn may be bottoming out, lifting industrial demand for the
metal. A fall in the gold-silver price ratio to 63 from 72 a
month ago suggests silver is now good value compared to gold.
"If base metals are set to move sharply higher, silver, with
its high proportion of industrial demand, could benefit too,"
UBS analyst John Reade said in a note.
"But...we are wary of the moves seen in many base metals, as
we are not expecting a strong V shaped economic recovery and
investors appear to have become too enthusiastic about the
commodity story," he added.
Among other precious metals, platinum <XPT=> was at $1,255
an ounce against $1,265, while palladium <XPD=> was at $274.50
against $274.
(Editing by Anthony Barker)
