* Dollar weakens versus euro, supporting gold
* U.S. retail sales, consumer sentiment data eyed
* Russian state repository to sell more gold to cenbank
(Updates, adds comment, changes dateline from TOKYO)
By Jan Harvey
LONDON, Dec 11 (Reuters) - Gold prices rose above $1,140 per
ounce in Europe on Friday, moving further away from near-four
week lows hit recently, as buyers stepped tentatively into the
market with support from a weaker dollar.
Many investors had parked on the sidelines ahead of year-end
after a sharp correction from record highs last week at
$1,226.10 per ounce, analysts said. Most anticipate fresh buying
will kick in once the new year gets underway.
Spot gold <XAU=> was bid at $1,141.15 an ounce at 1120 GMT,
against $1,130.15 late in New York on Thursday. U.S. gold
futures for February delivery <GCG0> on the COMEX division of
the New York Mercantile Exchange rose $16.40 to $1,142.60.
"We are in for more gains at the start of next year, but at
the moment, speculators will take a step back, and look at the
dollar," said VTB Capital analyst Andrey Kryuchenkov.
"We are maybe going to stay in this range of $1,120-1,160
until the end of the year, and then see more sustained gains."
The euro firmed against the dollar, rising to $1.4760 from
$1.4734 late in New York on Wednesday. []
Traders are eyeing key U.S. data due later in the session,
including November retail sales numbers at 1330 GMT and the
University of Michigan consumer sentiment index for December at
1455 GMT, for clues as to the future direction of trade.
Any further losses in the dollar could benefit gold.
Weakness in the U.S. unit boosts the precious metal's appeal as
an alternative asset and makes dollar-priced commodities cheaper
for holders of other currencies.
Among other commodities, oil prices also edged up 0.8
percent to above $71 a barrel. Gold tends to track crude prices,
as the metal can be bought as a hedge against oil-led inflation.
Elsewhere a source at the Russian state repository Gokhran
said on Friday it is likely to sell 30 tonnes of gold to the
country's central bank next week. Traders say central bank
interest in gold as a reserve asset is growing. []
CHINA OUTPUT CLIMBS
On the physical side of the market, premiums for gold bars
firmed in Asia after gold retreated from record highs, while
higher Indian jewellery during the wedding season helped offset
scrap sales from other Asian holders, dealers said. []
China's Ministry of Industry and Information Technology said
on Friday the country produced 26.354 tonnes of gold in October.
Gold output in the first 10 months rose 14.1 percent to 254.552
tonnes, it added. []
China is the world's main gold producer, and is set to take
over from India as the biggest bullion consumer this year as
well, according to the World Gold Council. []
On the investment side, the world's largest gold
exchange-traded fund, the SPDR Gold Trust <GLD>, said its
holdings held steady on Thursday after seeing their biggest
outflow since July earlier this week. []
Among other precious metals, silver <XAG=> was at $17.56 an
ounce against $17.37, platinum <XPT=> was at $1,444.50 an ounce
against $1,422 and palladium <XPD=> at $365.50 against $362.50.
James Moore, an analyst at TheBullionDesk.com, said he
expects to see further gains the platinum group metals.
"Further chart support around $1,390-1,410 and $358/353 is
expected in the coming sessions, with the longer-term outlook
still upbeat as recovering auto and industrial sales are set to
increase metal demand," he said.
ETF Securities said holdings of its ETFS Physical Palladium
exchange-traded product <PHPD.L>, which gives investors in its
securities exposure to the spot palladium price, rose to a
record 650,273 ounces on Thursday.
Prices of fellow platinum group metal rhodium <RHOD-LON>
continued to correct on Friday after rising to 13-month highs at
$2,750 an ounce at the end of November. They have since declined
23 percent to $2,125 an ounce.
(Reporting by Jan Harvey; Editing by Veronica Brown)
