* Dollar weakens versus the euro, boosting interest in gold
* ETF interest eyed after outflows in January
* Anglo American urges working together on SAfrican power
(Updates prices, adds comment)
By Jan Harvey
LONDON, Feb 2 (Reuters) - Gold pared gains on Tuesday after
earlier hitting a near two-week high at $1,116.25 an ounce, as
the dollar recovered some of its earlier losses versus the euro
amid fears over the health of smaller euro zone economies.
Spot gold <XAU=> was bid at $1,111.10 an ounce at 1518 GMT,
against $1,105.30 late in New York on Monday. U.S. gold futures
for February delivery <GCG0> on the COMEX division of the New
York Mercantile Exchange rose $5.40 to $1,109.70 an ounce.
The metal remained well supported near $1,110 an ounce by
technical factors, however.
"There is some fresh money being invested, and that is
helping us get out of the range we had established at
$1,085-$1,105," said Deutsche Bank trader Michael Blumenroth.
"Now that range is broken, some technical buying is coming in."
Gold was also lifted by the dollar edging lower versus the
euro <EUR=> on Tuesday as Greek government bond spreads over
German benchmarks narrowed. []
The single currency remains under pressure, however, from
fears over the outlook for a number of smaller euro zone
economies. Investors are awaiting the European Commission's
reaction to Greece's plan to fix its finances.
Underlining the possibility that fiscal concerns may extend
beyond Greece, European Central Bank Governing Council member
Vitor Constancio said on Tuesday Portugal's economy required
"significant adjustments". []
On the physical investment side, holdings of the world's
largest gold ETF, New York's SPDR Gold Trust, were unchanged on
Monday, but fell 21.7 tonnes in January, against a rise of 63.36
tonnes in the same month a year before. []
RBS Global Banking & Markets analyst Daniel Major said an
outflow of investment from gold exchange-traded funds was a risk
factor for prices.
"After having very impressive inflows during most of last
year, we saw 23 tonnes of redemptions from the family of gold
exchange-traded funds in January," he said. "That is not
particularly positive."
TURKEY IMPORTS RECOVER
The financial markets are awaiting key U.S. non-farm
payrolls data and interest rate decisions from the European
Central Bank and Bank of England later in the week. []
Elsewhere, figures from the Istanbul Gold Exchange showed on
Tuesday that Turkey imported 60 kg of gold in January, up from
30 kg in December and zero in January 2009. []
Among other commodities, oil prices rose more than 1
percent, while base metals prices firmed. Gold tends to track
crude prices, as the metal can be bought as a hedge against
oil-led inflation. [] []
Silver <XAG=> was bid at $16.65 an ounce against $16.64. The
largest silver-backed ETF, the iShares Silver Trust <SLV>,
reported a 29-tonne outflow on Monday. []
Platinum <XPT=> was at $1,554.50 an ounce against $1,548.50,
while palladium <XPD=> was at $437 against $428.50.
The head of miner Anglo American <AAL.L> said on Monday that
South Africa's mining sector needs to work closely with utility
Eskom to find ways of cutting power consumption in the face of
planned steep rises in electricity prices. []
Anglo American is the parent company of the number one
platinum miner Anglo Platinum <AMSJ.J>. Analysts have pointed to
potential power-related constraints on supply as a possible
supportive factor for platinum prices this year.
Societe Generale said in a report late on Monday that it
sees platinum at an average $1,565 in 2010, with further gains
capped in part by weakness in jewellery demand.
"We continue to expect some further mild price strength in
the second quarter of the year as the auto sector in particular
continues to recover," it said.
"But -- subject of course to potential stresses in the South
African mining sector in particular -- we adhere to our view
that the re-rating of platinum's price, with its doubling from
its late 2008 low, is complete," it added.
(Editing by Sue Thomas)
