* Gold slips on dollar strength, soft physical demand
* Euro likely to see further losses ahead of ECB meeting
(Adds fresh comment/details, changes dateline PVS SINGAPORE)
By Anna Stablum
LONDON, Jan 12 (Reuters) - Gold slipped 1 percent on Monday
as oil dropped and the euro extended losses against the dollar,
while physical demand was seen softening.
"We suspect that further dollar strength might put gold
under pressure over the coming week," said analyst David
Thurtell at Citi.
Investors awaited the European Central Bank's policy meeting
on Thursday, which could set the direction of the dollar amid
expectations of more rate cuts keeping the euro on the
defensive. []
"The euro is likely to fall as the European Central Bank
cuts rates to stem the decline in the Euro zone economy," Citi's
Thurtell said.
Gold <XAU=> was trading at $844.60 an ounce by 1025 GMT,
down 1 percent from $853.60 in New York late on Friday.
Thurtell said gold was supported at around $835.
But physical demand was seen softening after holding firm in
the normally very strong fourth quarter.
"It tends to tail out in the first quarter ... the market
over the next few weeks will probably focus on weaker demand,"
said analyst Michael Widmer at BNP Paribas.
Gold has bounced more than 20 percent since tumbling to a
13-month low around $680 in late October. Bullion struck a record
$1,030.80 last March.
Oil <CLc1> dropped below $39 a barrel on persistent worries
about falling demand following Friday's dismal U.S. payrolls
report, which showed 1.1 million jobs lost since November and
the highest unemployment rate since 1993. [].
"Gold came off in line with the stronger dollar and the
weaker oil price," a trader said, adding trading was calm on
Monday.
The euro <EUR=> fell to $1.3381 amid talk of an aggressive
cut in eurozone interest rates later this week, with speculation
rife the central bank will cut its key lending rate by 50 basis
points to 2 percent. []
On COMEX, speculative gold players boosted their net long
positions to 133,604 at Jan. 6, up from 125,961 net longs at
Dec. 30, Commodity Futures Trading Commission data showed.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, said it held 787.60 tonnes of gold as of
Jan. 9, down 0.28 tonnes from a record 787.88 tonnes on Jan. 7.
[]
Holdings in the trust, which issues securities backed by
physical stocks of gold, began climbing again in December after
poor prospects for the global economy ignited demand for bullion
as a safe-haven asset. <XAUEXT-NYS-TT>.
Platinum <XPT=> was trading at $989 an ounce, down from
$992.50 in New York on Friday. Silver <XAG=> was at $11.09, from
$11.24, and palladium <XPD=> was unchanged at $191.
New York gold futures <GCZ9> fell $2.8 an ounce to $859.
(Additional reporting by Pratima Desai in London and Lewa
Pardomuan in Singapore, editing by Peter Blackburn)
