* Stock markets fall in Europe; lower U.S. open expected
* Physical demand improves ahead of Indian festival
* Chinese platinum imports rise in March
(Updates prices)
By Jan Harvey
LONDON, April 22 (Reuters) - Gold climbed in Europe on
Wednesday as European shares and U.S. stock futures extended
declines, boosting interest in the metal as a haven from risk.
Spot gold <XAU=> was bid at $887.05 an ounce at 1245 GMT,
against $882.25 an ounce late in New York on Tuesday.
"(Gold) is looking at equity markets for direction right
now," Standard Bank analyst Walter de Wet said. "Equities play
an important role, particularly in a week when there is no
really important macro data."
U.S. stock futures fell further after a raft of corporate
results, with Morgan Stanley <MS.N> reporting a net loss. []
European shares also fell, reversing earlier gains, after
the numbers. Volatility in stock markets helps gold, which is
often bought as a safe store of value.
On the currency markets, the dollar -- which is perceived as
a less risky currency due to its liquidity -- rose to a
one-month high against the euro, hurt by falling equities.
[]
A firmer dollar typically weighs on gold, which is often
bought as an alternative asset to the U.S. currency. But the
relationship between the two has weakened in recent months as
both take their cues from risk aversion.
Elsewhere an uptick in physical demand for the metal in Asia
ahead of the Akshaya Tritya festival on April 27 -- an
auspicious time for gold buying -- is also helping support
prices.
"We sold around 100 kgs this morning," said a dealer with a
private bank in Mumbai. Gold imports in India have also picked
up this month after an extremely slow period at the beginning of
2009. []
Investor demand remained relatively sluggish, however.
Holdings of the SPDR Gold Trust <GLD>, the world's largest
gold-backed exchange-traded fund, were steady on Tuesday from
the previous day.
DECLINE
The trust's holdings have declined 19.01 tonnes in the last
four weeks, compared with a rise of 96.01 tonnes in the
preceding four weeks.
"The 21.7 tonnes in ETF outflows that were made on Thursday
and Friday... will counteract support from the predicted 30
tonnes in imports to India," said MF Global in a note.
Inflows into gold-backed ETFs jumped to an all-time high in
the first quarter of this year, the World Gold Council said on
Wednesday. []
Among other precious metals, spot platinum <XPT=> was bid at
$1,174 an ounce against $1,152.50, while palladium <XPD=> was
bid at $229.50 an ounce, up from $222.
The UK government announced it will implement a car
scrapping scheme similar to the 'cash-for-clunkers' initiatives
already in place in countries such as Germany, which have
boosted car sales there. []
Around half of platinum is used by the automotive industry.
Chinese imports data released on Wednesday showed China
imported 3,566 kilograms of platinum in March, up more than 35
percent from a year before. []
The figures reflect a rise in platinum jewellery buying in
China at the beginning of the year, dealers said, with jewellers
taking advantage of lower prices to rebuild stocks of the metal.
"The market is obviously excited about China's net purchases
of platinum which are running considerably above year earlier
levels," JPMorgan said in a note.
Spot silver <XAG=> was bid at $12.13 an ounce against
$11.99, tracking gains in gold.
(Reporting by Jan Harvey; Editing by Sue Thomas)
