* Positive manufacturing data helps balance Egypt fears
* Recovering risk appetite, falling investment weigh on gold
* Largest gold, silver ETFs see historic outflows in January
(Releads, updates prices)
By Jan Harvey
LONDON, Feb 1 (Reuters) - Gold prices steadied on Tuesday
after well-received U.S. manufacturing data lifted the dollar
and boosted appetite for higher-risk assets at gold's expense,
balancing support lent by political upheaval in Egypt.
Spot gold <XAU=> was bid at $1,331.95 an ounce at 1612 GMT,
against $1,331.90 late in New York on Monday. U.S. gold futures
for April delivery <GCJ1> fell $1.80 an ounce to $1,332.70.
The precious metal rose as high as $1,341.18 an ounce in
earlier trade as concerns over unrest in Egypt lifted interest
in the metal as a haven, but later surrendered gains, falling as
low as $1,325.30 after positive U.S. manufacturing data.
"In general the market wouldn't like to be short because it
is afraid of the geopolitical risks we are seeing at the
moment," said Deutsche Bank senior trader Michael Blumenroth.
"On the other hand, there are not so many incentives to be
long at the moment because the big hedge funds are putting money
away from the gold market into riskier markets at the moment."
Gold in January posted its biggest monthly drop since Dec.
2009 as investor risk appetite improved, diverting interest from
so-called havens such as gold into higher-yielding assets.
The largest gold exchange-traded fund, the SPDR Gold Trust
<GLD>, saw its second-largest monthly outflow ever in January.
The iShares Silver Trust <SLV>, the main silver ETF, said its
holdings fell by the most ever in a single month. []
"Right now confidence is coming back into the market and
safe havens are not so much in demand," said Commerzbank analyst
Eugen Weinberg.
The latest well-received manufacturing data helped lift the
dollar index <.DXY> from earlier 2-1/2 month lows, while U.S.
stocks also rose. [] [] []
These factors outweighed concerns over unrest in Egypt,
which earlier lifted gold as high as $1,341.18.
Hundreds of thousands of Egyptians, from students and
doctors to the jobless poor, swamped Cairo on Tuesday in the
biggest demonstration so far in an uprising against an
increasingly isolated President Hosni Mubarak. []
BAR PREMIUMS RISE IN TOKYO
Asian physical gold demand lent some support to gold prices,
although this is tailing off as China's Lunar New Year holiday
celebrations get underway.
Premiums for gold bars soared to their highest in more than
two years in Tokyo on Tuesday and could rise further as steady
shipments to other bullion trading centres in Asia led to a
tight supply, dealers said on Tuesday. []
Gold imports in India, the world's largest consumer of the
yellow metal, rose 18 percent in January to 40 tonnes
provisionally, higher than a Reuters forecast, the head of the
Bombay Bullion Association told Reuters. []
Among other commodities, oil prices edged a touch lower
after hefty gains in the previous session that took Brent crude
past the $100-a-barrel mark. []
Higher oil prices could weigh on platinum group metals
prices if they affect car sales, UBS said in a note. Automakers
are the main buyers of platinum and palladium.
"The potential impact of dear oil was noted consistently by
dealers, who fear that higher prices at the pump could hamper
the fragile auto market recovery," UBS analyst Edel Tully wrote.
Carmakers are making a strong start to 2011, soothing
concerns about slower demand growth in Asia and a bumpy recovery
in western markets. []
Platinum <XPT=> was at $1,812.74 an ounce against $1,791.50,
while palladium <XPD=> was at $818.72 against $811.97. Silver
<XAG=> was bid at $28.24 an ounce against $28.04.
(Reporting by Jan Harvey; editing by Keiron Henderson)
