* Dollar slides to 14-mth lows, eyes equities for direction
* Gold technically well-placed to break previous record high
* Platinum, palladium hit multi-month highs as gold rallies
(Updates prices)
By Jan Harvey
LONDON, Oct 20 (Reuters) - Gold rose towards $1,065 an ounce
in Europe on Tuesday as persistent weakness in the dollar
fuelled buying of the precious metals as an alternative asset.
Platinum and palladium reached their highest in more than a
year, buoyed by gold and supply concerns.
Spot gold <XAU=> was bid at $1,063.70 an ounce at 1101 GMT
against $1,062.70 late in New York on Monday. U.S. gold futures
for December delivery <GCZ9> on the COMEX division of the New
York Mercantile Exchange rose $6.70 to $1,064.80 an ounce.
Standard Bank analyst Walter de Wet said given the dearth of
physical demand for bullion, gold was primarily driven by the
dollar, which in turn was in thrall to sentiment on the equity
markets as earnings season advances.
"(The rise of gold) is a dollar story at this stage, because
in terms of real physical demand, there is not much," he said.
"We are waiting for a whole bunch of earnings reports to
come into the market, and if the past week's reports are
anything to go by, these ones will also be positive," he added.
"If you see equities rising and U.S. Treasuries being sold,
dollars will also be sold, which will make the dollar weaker."
World stocks <.MIWD00000PUS> hit a new 12-month high on
Tuesday, fuelled by optimism over corporate earnings and the
global recovery after strong results from U.S. heavyweights
Apple <AAPL.O> and Texas Instruments <TXN.N>. []
The dollar is under pressure from rising risk appetite --
which benefits higher-yielding currencies -- expectations low
U.S. interest rates will be sustained and questions about its
status as the global reserve currency. []
The U.S. unit slid to fresh 14-month lows against the euro,
with the single currency <EUR=> rising close to $1.50.
"Even though speculative interest in gold futures and
options is at record highs and global ETF holdings are swollen,
we could see even more spec money entering the market (if) the
greenback tumbles," said VTB Capital analyst Andrey Kryuchenkov.
TECHNICAL SUPPORT
Gold is technically well placed to build on the 6 percent
rally it has posted in the last month, analysts who study charts
of past price movements said.
"Gold is now in its third week of trying to break through
its $1,059/71 resistance area," Commerzbank said in a note.
"Referring to the daily chart, we can see that the market
remains bid though and that the above resistance area is
now likely to be breached," they added. "The next minor upside
target is seen at $1,079/1,082."
There was little reported gold buying by bullion-backed
exchange-traded funds -- a major driver of prices in the first
quarter of 2009 -- with holdings of the largest, the SPDR Gold
Trust <GLD>, unchanged for an eighth day on Monday. []
Jewellery buying in India, the world's biggest gold consumer
last year, was also lacklustre as festival season ended.
Spot silver <XAG=> was at $17.73 an ounce against $17.78.
Platinum and palladium both rose to their highest in more
than a year, with platinum hitting a 13-month high of $1,368 an
ounce and palladium reaching a peak of $334.50, its firmest
since August 2008.
Spot platinum <XPT=> was later at $1,361 an ounce against
$1,355.50, while palladium <XPD=> was at $334 against $332.
Both metals benefitted from strong underlying fundamentals,
with concern persisting over the outlook for South African
supply as the strong rand boosts producers' relative costs, and
Russian palladium supply still lacklustre.
Palladium demand is also picking up in China, analysts said.
(Editing by Sue Thomas)
