* Firmer euro, oil help boost gold
* SPDR gold ETF sees biggest outflow in a year in July
* Physical demand surfacing in Asia, Middle East
* Palladium breaks $500/oz to highest since May 17
(Updates prices)
By Jan Harvey
LONDON, Aug 2 (Reuters) - Gold rallied for a fourth day on
Monday as the euro firmed to a three-month high against the
dollar and as prices of other commodities such as crude oil
jumped.
Spot gold <XAU=> rose as high as $1,190.40 an ounce and was
bid at $1,184.75 an ounce at 1505 GMT, against $1,181.50 late in
New York on Friday. U.S. gold futures for August delivery <GCQ0>
rose $5.50 to $1,187.20.
Simon Weeks, head of precious metals at the Bank of Nova
Scotia, said gold had risen above the 100-day moving average at
$1,183 an ounce on the back of currency moves and rising oil
prices. "Next resistance is $1,200-$1,205," he said.
He added that gold remained vulnerable to losses, especially
if equity markets continued to climb. "People will liquidate
safe havens and put risk on," he said.
Gold managed to arrest a slide that last week took it to a
three-month low of $1,156.90 an ounce and then turn higher in
its best run since late May.
Gold is showing signs of re-establishing its usual inverse
link with the dollar and is benefiting from gains in other
commodities, given that it is often bought as part of a
commodity basket by investors.
Investment in gold has ebbed recently, however, as assets
seen as higher risk such as stocks have firmed.
The world's largest bullion exchange-traded fund, the SPDR
Gold Trust <GLD>, reported its biggest outflow in a year last
month, with holdings down more than 38 tonnes in July to 1,282.3
tonnes. []
Wall Street rose on Monday, building on last month's solid
gains as investors focused on encouraging corporate results,
including strong bank earnings out of Europe. []
Other assets seen as higher risk also rose, with oil prices
climbing nearly 3 percent above $80 on Monday as macroeconomic
indicators in top energy consumers the United States and China
showed slower but sustained growth. []
In the United States, the Institute for Supply Management
said its index of factory activity fell to 55.5 in July from
56.2 in June. This was its lowest reading this year but remained
above consensus and above the 50-mark, which separates
contraction from expansion in the U.S. manufacturing sector.
DOLLAR SLIDES
Ongoing concern about the strength of the U.S. economic
recovery pushed the dollar <.DXY> to a three-month low on
Monday, while the euro <EUR=> extended gains to above an
important technical level that analysts say suggests the
currency's rally is gaining momentum. []
Lower prices, meanwhile, encouraged higher gold demand from
key bullion-consuming centres China, India and the Middle East.
[] [] []
The World Gold Council said the International Monetary Fund
sold 17.4 tonnes of gold in June as part of a planned programme
of bullion sales. That leaves 120.2 tonnes of gold still to be
sold under the programme. []
Silver <XAG=> was up by over 2.5 percent at $18.42 an ounce
versus $17.96, making this its strongest one-day performance
since early June, while its ratio to gold -- or how many ounces
of silver are needed to buy an ounce of gold -- hit its lowest
since mid-May at 65.0.
Platinum <XPT=> was at $1,586.50 an ounce against $1,566.55,
while palladium <XPD=> was at $508.50 against $491, having hit
its highest since mid-May earlier in the day.
Both metals generated significant interest on the New York
futures market last week, according to the Commodity Futures
Exchange Commission's Commitment of Traders report.
(Editing by Jane Baird)
