* Weakening equities support gold but firm dollar weighs
* Markets await U.S. CPI, industrial production data
(Updates throughout, previous TOKYO)
By Jan Harvey
LONDON, April 15 (Reuters) - Gold was little changed in
Europe on Wednesday, caught between the contradictory pressures
of softer equities, a firmer dollar, and conflicting
expectations for inflation.
Traders waited for direction from U.S. inflation data due
later in the session, as well as industrial production figures.
Gold is typically bought as a hedge against rising prices.
Spot gold <XAU=> was bid at $890.10 an ounce at 0905 GMT
against $888.85 late in New York on Tuesday.
"We are stuck in a range here," said Saxo Bank senior
manager Ole Hansen. "Conflicting messages are pulling gold in
either direction."
"As we are trading sideways obviously technical levels will
have an impact," he added. "Above $900 (we could) move up to
$918, and below $885 we could see some selling return to the
market which could take us down to $865, and maybe to $850."
Equities have benefited from a more optimistic outlook for
the financial sector, after positive earnings from Goldman Sachs
<GS.N> and Wells Fargo <WFC.N>.
However, fears over banking stocks have resurged after UBS
<UBSN.VX> warned on Wednesday of a first-quarter loss and said
it will cut more jobs. []
European shares fell in early trade on worries over banks,
while Asian stocks pulled back from six-month highs. []
This should be positive for gold as an alternative to
stocks, but the firmer dollar and U.S. economic data that have
calmed immediate inflation concerns kept a lid on gains.
HSBC said in a note a 1.1 percent fall in U.S. March retail
sales from the month before and a 3.5 percent year-on-year
contraction in the producer price index reported Tuesday were
deflationary and had pulled gold back from the $900 level.
RECOVERY
The firmer dollar also helped to limit the gold price. The
dollar gained as hopes for a recovery in the global economy
faded after weak economic data from the United States, boosting
interest in the currency as a haven. []
A stronger dollar tends to weigh on gold, which is often
bought as an alternative investment to the U.S. currency.
Investment demand also remains tentative, with holdings of
the world's largest gold-backed exchange-traded fund, the SPDR
Gold Trust <GLD>, unchanged on Tuesday from last Thursday.
[]
"With further strong resistance anticipated around $900,
upside momentum may be curtailed until ETF and investment demand
picks up again," said TheBullionDesk.com analyst James Moore.
However, gold demand in India, the world's largest bullion
market, firmed as traders stocked up ahead of the Hindu festival
of Akshaya Tritya on April 27. []
Among other precious metals, spot platinum <XPT=> was bid at
$1,220.50 an ounce against $1,204 late on Tuesday, while spot
palladium <XPD=> was bid at $235 an ounce against $230.
The two metals are consolidating after recent gains that
took them to multi-month highs, after London-based ETF
Securities filed to register the first ETFs backed by platinum
and palladium in the U.S. market.
"It seems (platinum) is going to pause for now,
consolidating below $1,240," said VTB Capital in a note. "A
sustained breach of this level would signal more gains, as the
metal still looks bullish in the long run."
Spot silver <XAG=> was bid at $12.69 an ounce against
$12.72.
(Reporting by Jan Harvey; Editing by William Hardy
