* Weak euro due to euro-zone fiscal worries pressures gold
* Gold miners target higher output in 2010
* Platinum group limits losses on better U.S. auto sales
(Recasts, updates with comments, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 3 (Reuters) - Gold turned lower on
Wednesday, snapping a two-day winning streak as a weak euro
against the dollar amid fiscal worries in euro-zone countries
weighed down on sentiment.
A resurgent dollar has limited gold prices to a broad
trading range in the past two months, and the weak trend for
gold could persist if worries about euro and other currencies
lingered, analysts said.
Bruce Dunn, vice president of trading at New Jersey-based
Auramet, said gold was pressured by fiscal worries in Greece
and Spain, and China's recent raising bank reserve
requirements.
"Gold has really struggled in recent months between $1,125
and $1,150 an ounce. You certainly need much stronger euro --
the $1.41 or $1.42 levels would be more compelling to see the
gold rally," Dunn said.
Spot gold <XAU=> had hit a peak of $1,124.45, the highest
since Jan. 20, but was last at $1,109.50 an ounce at 3:16 p.m.
EST (2016 GMT), lower than $1,113.95 late on Tuesday.
U.S. gold futures for April delivery <GCJ0> settled down $6
at $1,112 an ounce on the COMEX division of NYMEX.
Analysts said that the positive link between bullion and
other commodities has strengthened as a resurgent dollar
triggered broad-based losses. []
"The correlation between gold and other key commodities is
very high at the moment, they are all trading together," said
Jesper Dannesboe, commodity strategist at Societe Generale.
Gold prices have reacted negatively in recent weeks to any
talk suggesting that U.S. monetary policy could be tightened.
Higher U.S. interest rates could dent the appeal of gold as a
non-interest bearing asset.
Earlier on Wednesday, gold prices fell as the dollar firmed
after news of U.S. private job creation. []
"Maybe people think the number suggests that payrolls will
be pretty good," said David Thurtell, analyst at Citigroup.
"That raises the prospect of a view that the Fed will think
things are picking up and eventually tighten policy.
ON THE RADAR
Traders are waiting for key U.S. non-farm payrolls data and
interest rate decisions from the European Central Bank and the
Bank of England due later this week.
On the supply side, Toronto-based Iamgold <IMG.TO> said it
will produce about 1 million ounces in 2010 from 939,000 ounces
last year, and Russia's Highland Gold Mining <HGM.L> said it
plans produce 25 percent more this year.
Among other precious metals, platinum <XPT=> was at $1,572
an ounce versus $1,576.50, while palladium <XPD=> was at
$435.50 against $439.50.
Platinum group prices held firm on the back of better U.S.
auto sales data on Tuesday. Carmakers are the biggest consumers
of platinum and palladium, which are used as autocatalyst to
clean exhaust emission from vehicles.
In the investment sector, ETF Securities said total assets
of its four U.S. precious metals exchange traded products,
namely physical gold, silver, platinum and palladium, now
exceeded $1 billion. The company launched its silver ETF, its
first U.S. product, in July.
Silver <XAG=> was last at $16.34 an ounce against $16.68
late on Tuesday.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCJ0> 1112.00 -6 -0.5 1096.20 1.4
US silver <SIH0> 16.317 -0.426 -2.5 16.845 -3.1
US platinum <PLJ0> 1576.20 -2.60 -0.2 1471.00 7.2
US palladium <PAH0> 436.80 -7.95 -1.8 408.85 6.8
Prices at 3:36 p.m. EST (2036 GMT)
Gold <XAU=> 1109.70 -4.25 -0.4 1096.35 1.2
Silver <XAG=> 16.34 -0.34 -2.0 16.84 -3.0
Platinum <XPT=> 1575.00 -1.50 -0.1 1465.50 7.5
Palladium <XPD=> 435.00 -4.500 -1.0 405.50 7.3
Gold Fix <XAUFIX=> 1115.25 -3.25 -0.3 1104 1.0
Silver Fix <XAGFIX=> 16.79 1.00 0.1 16.99 -1.2
Platinum Fix <XPTFIX=> 1578.00 8.00 0.5 1466 7.6
Palladium Fix<XPDFIX=> 442.00 4.00 0.9 402 10.0
(Additional reporting by Pratima Desai and Veronica Brown in
London; Editing by Marguerita Choy)
