* Dollar lifts from 6-1/2 month lows vs the euro
* Good buying reported in main consumer India
* WGC says Russia, China, Philippines may lift gold reserves
(Updates prices, adds comment)
By Jan Harvey
LONDON, Oct 4 (Reuters) - Gold steadied on Monday, supported
near record highs as investors fretted about the outlook for the
dollar amid speculation of further U.S. monetary easing, but
with a recovery in the U.S. unit keeping a lid on gains.
Spot gold <XAU=> was bid at $1,315.55 an ounce at 1347 GMT,
against $1,315.60 late in New York on Friday. It touched a
record $1,320.80 an ounce in that session. U.S. gold futures for
December delivery <GCZ0> eased $1.20 to $1,316.60.
The dollar slipped last week and gold rose to a series of
record highs after a string of lacklustre U.S. data reports
raised concerns that the U.S. authorities would have to take
action to boost sluggish growth.
It struggled to gain traction on Monday, however, as
resurgent fears over some euro zone economies, most notably
Ireland, helped the dollar recover from the 6-1/2 month low it
hit against the euro earlier on Monday. []
"Gold is holding up comparatively well considering the
rebound in the U.S. dollar. Friday's highs were tested, and the
price has come in for light profit-taking," said David Thutell,
an analyst at Citigroup.
"(But) I suspect that for many months there will be enough
market participants who don't buy the recovery story and will
keep buying gold."
Analysts said the dollar may find some short-term relief as
investors cover short positions in the currency, but many say
the trend for dollar weakness is intact amid ongoing speculation
the Federal Reserve could ease U.S. monetary policy further.
Analysts are now eyeing key U.S. non-farm payrolls data due
on Friday for clues as to the next direction of the dollar.
"Continued deterioration in U.S. economic data would
reinforce the already negative sentiment surrounding the
dollar," said CMC Markets analyst Michael Hewson in a note.
"This Friday's U.S. employment and payrolls report for
September should offer clues as to whether or not the U.S.
economy is starting to turn around."
HIGHER PRICES SEEN
However, concerns about the stability of the euro zone have
again come to the forefront.
The Irish central bank said on Monday that Ireland's economy
will crawl to a virtual halt this year, defying government hopes
of modest growth, underlining the challenge the country's
leaders face to revive its fortunes. [].
Concerns over the stability of the dollar and the euro are
both gold supportive. A Reuters poll of analysts last week found
most felt gold's run to record highs is likely to continue for
the rest of 2010, with two out of three seeing prices above
$1,350 by year-end. []
Eleven out of the 21 analysts polled said they expected the
precious metal to be trading between $1,350 and $1,400 an ounce
by Dec. 31, while two respondents saw prices higher still.
On the physical markets, gold demand was firm despite
near-record prices. Buying by Indian gold jewellers showed no
sign of slowing as a strong rupee helped consumers defy record
bullion prices during the festive season, dealers said. []
A senior official at the World Gold Council told Reuters
that central banks in Russia, China and the Philippines are
expected to continue raising their gold holdings to balance
their reserves, a potentially significant demand driver.
[]
Silver <XAG=> was at $22.09 an ounce versus $21.97.
As a smaller and less liquid market, silver has outpaced the
rise in gold prices so far this year, with the gold-silver ratio
- the number of silver ounces needed to buy an ounce of gold -
dipping below 60 for the first time in nearly a year last week.
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For a graphic showing the development of the gold-silver
ratio, click on:
http://graphics.thomsonreuters.com/AS/0810/RS_20100410113232.jpg
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Elsewhere platinum <XPT=> was at $1,671.50 an ounce against
$1,675.15, and palladium <XPD=> at $568 against $569.50.
(Reporting by Jan Harvey; Editing by Alison Birrane)
