* Spot gold rises 2 percent
* Euro spurred on, dollar dips after euro zone PMI data
* Analysts favour downside for rangebound bullion
* SPDR Gold holdings <XAUEXT-NYS-TT> steady
(Updates comments and prices)
By Veronica Brown
LONDON, Aug 21 (Reuters) - Gold climbed 2 percent to a
one-week high on Friday, in tandem with a stronger euro, after
robust euro area economic data dented the dollar's appeal and
made bullion cheaper for non-U.S. investors.
Spot gold <XAU=> rose as high as $957.65 an ounce, its
highest since Aug. 14 and was at $953.50 an ounce by 1232 GMT,
versus $939.35 quoted late in New York on Thursday.
U.S. gold futures for December delivery <GCZ9> rose $13.50
to $955.20 per ounce.
"The euro pushed up through 1.43, which has helped gold,"
said Tom Kendall, precious metals strategist at Mitsubishi Corp,
adding the rise in oil prices had also supported bullion.
The euro hit a two-week high against the dollar and a
one-month high versus sterling on fresh data adding to the view
the region's economy is improving while oil touched its highest
of 2009 above $74 a barrel.[][]
But the upside looked capped for bullion in the absence of
physical demand and analysts said the struggle to break out of
recent ranges could well result in downside capitulation, before
another attempt to break above psychological resistance at
$1,000.
"There isn't really the driving force of physical demand
from either the jewellery sector or from the investment
sector...to help carry the price higher," Kendall said.
On the macro front, a provisional purchasing managers' poll
revealed the decline in the euro zone's dominant services sector
almost came to a halt in August and businesses' expectations for
the future soared to their highest level in more than two years.
[].
This helped the euro <EUR=> and European share markets
<> to secure a firmer footing, while the dollar dropped,
as the data boosted views that the worst of recession may have
passed in the single currency area.
On precious metal markets, analysts say potential inflation
that could accompany a fledgling recovery may boost gold's
appeal as a hedge against rising price pressures.
PHYSICAL DEMAND LACKING
Asia-based traders said the absence of demand for gold
jewellery, as demonstrated by falling imports in India, was a
factor weighing on the spot market.
India's July gold imports fell two-thirds from a year
earlier as high prices dented demand in one of the world's top
markets where gold jewellery is often given as gifts during
festival seasons or at weddings, a trade body said this week.
[]
"Gold is a luxury item but in this day and age money is
going where it is needed ... and a prime example of that
happening is in India," said Kazuhiko Saito, chief analyst at
Tokyo's Fujitomi Co Ltd.
The SPDR Gold Trust <GLD>, the world's largest, said its
holdings held steady at 1,065.49 tonnes as of Aug. 20, unchanged
for almost two weeks and down 68.54 tonnes from a record marked
on June 1. []
In other metals, platinum <XPT=> edged up to $1,238.50 an
ounce from $1,236.50 an ounce. Dealers said however that prices
may find support depending on developments in South Africa, the
world's top producer of the precious metal.
Impala Platinum <IMPJ.J>, the world's second-biggest
platinum producer, said on Thursday it was seeking further talks
with a South African union planning an indefinite strike next
week. []
Silver rose 2 percent to $14.18 <XAG=>, following gold and
base metals, while palladium was unchanged at $272.00.
(Additional reporting by Humeyra Pamuk in London and Miho
Yoshikawa in Tokyo; editing by Sue Thomas)
