* Dollar rises versus euro on Greece debt concerns
* Oil, industrial metals also pressured by Greece
* Euro-priced gold holds steady near 810 euros/oz
(Updates prices)
By Jan Harvey
LONDON, Feb 25 (Reuters) - Gold prices retreated from the
$1,100 an ounce level in Europe on Thursday as the euro slipped
back towards a nine-month low versus the dollar, pressured by
persistent worries about Greece's fiscal health.
Spot gold <XAU=> was bid at $1,094.45 an ounce at 1208 GMT,
against $1,097.25 late in New York on Wednesday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange fell $1.40 to $1,095.70 an ounce.
"There are a few factors that are helping the dollar -- the
euro zone worries...and there is a little less reserve
diversification from emerging markets," said Michael Widmer, an
analyst at Bank of America-Merrill Lynch.
"It has already risen quite a lot, but we still have a view
that by the end of this year the euro will be well below $1.30,
so the dollar could rise further from here. That will make it
difficult for assets like gold to perform very strongly."
The U.S. unit's rise has made dollar-denominated gold more
expensive for holders of other currencies. Euro-priced gold
<XAUEUR=R>, however, rose to 811.53 euros an ounce, against
809.95 euros an ounce late on Wednesday.
The euro declined against other currencies too, hitting a
one-year low against the yen, as worries over a possible
downgrade of Greece's sovereign debt triggered fresh worries
about the fiscal health of smaller euro zone economies. []
Ratings agency Standard and Poor's said late on Wednesday it
may cut Greece's BBB+ rating by one or two notches within a
month. []
The dollar had suffered on Wednesday after Federal Reserve
Chairman Ben Bernanke told Congress a weak jobs market and low
inflation would likely allow the Fed to keep rates low for "an
extended period."
Fears over economic stability and the stronger dollar also
weighed on other commodities, with oil prices sliding below $80
a barrel and industrial metals also declining. [] []
INVESTOR SENTIMENT
Investment interest in gold was relatively lacklustre. The
world's largest gold exchange-traded fund, New York's SPDR Gold
Trust <GLD>, reported no change in its holdings on Wednesday.
The fund has seen outflows of 26.7 tonnes so far this year,
against inflows of 248.75 tonnes in the same period of 2009.
"Investor sentiment appears to have turned against gold
temporarily, and while we are positive for the medium to longer
term, further short-term losses appear likely," HSBC said in a
note.
The World Gold Council told a news conference in Beijing
that gold demand from the top two global consumers, India and
China, had started strongly in 2010. []
Indian jewellers were buying regularly and tighter Chinese
monetary policy was not affecting purchases, it said.
India's February gold imports are expected to have risen to
30-35 tonnes, according to the head of Bombay Bullion
Association Suresh Hundia, from 7.9 tonnes in February 2009.
[]
Among other precious metals, silver <XAG=> was at $15.88 an
ounce against $15.96. Platinum <XPT=> was at $1,515 an ounce
versus $1,505, while palladium <XPD=> was at $419 against $420.
"Both (platinum group) metals are trading lower this morning
as a result of the pressure on gold and are susceptible to
deeper corrections short-term should chart support around
$1,500/1,490 in platinum and $412/404 in palladium fail," said
James Moore, an analyst at TheBullionDesk.com.
(Editing by James Jukwey)
