* Softening dollar allows prices to rise
* Markets await U.S. CPI, industrial production data
(Releads, updates prices)
By Jan Harvey
LONDON, April 15 (Reuters) - Gold firmed on Wednesday as the
dollar softened versus the euro, boosting the metal's appeal as
an alternative investment, but prices remained rangebound amid
conflicting signals on inflation and the outlook for equities.
Traders are waiting for direction from U.S. inflation data
due later in the session, as well as industrial production
figures.
Spot gold <XAU=> was bid at $893.75 an ounce at 1110 GMT
against $888.85 late in New York on Tuesday.
"We are stuck in a range here," said Saxo Bank senior
manager Ole Hansen.
"As we are trading sideways, obviously technical levels will
have an impact," he said. "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."
The euro inched higher against the dollar midmorning,
cutting early losses, as a recovery in European share prices
prompted traders to buy currencies perceived as higher-risk.
[]
A weaker dollar tends to benefit gold, which is often bought
as an alternative investment to the U.S. currency.
Equities benefited from gains in energy shares as oil prices
rose, helping offset fresh fears over the financial sector.
Concern over banking stocks resurfaced after UBS <UBSN.VX>
warned on Wednesday of a first-quarter loss and said it will cut
more jobs. []
This instability should be positive for gold, but overall
gains on the stock markets are likely to weigh on interest in
the metal, analysts said.
U.S. economic data released on Tuesday calmed immediate
inflation concerns but are also limiting gains, though analysts
say fiscal stimulus measures could boost inflation longer term.
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.
TENTATIVE
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 an ounce against $1,204 late on Tuesday, while spot
palladium <XPD=> was bid at $234 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 $12.89 an ounce against
$12.72.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
