CORRECTED - CORRECTED-PRECIOUS-Gold slips below $1,060/oz as dollar rebounds

                                
 (Corrects palladium high to $339.50 in second last paragraph)
                                
 * Dollar recovers from 14-mth lows versus the euro
                                
 * Gold technically well-placed to break previous record
                                
 * Platinum, palladium hit multi-month highs as gold rises
 (Recasts, updates comments, closing prices, market activity,
adds second byline, dateline)
                                
 By Frank Tang and Jan Harvey
                                
 NEW YORK/LONDON, Oct 20 (Reuters) - Gold fell below $1,060
an ounce on Tuesday as the dollar rebounded from its weakest
level in 14 months versus the euro, clipping interest in the
metal as a hedge against a falling U.S. currency.
                                
 Gold's recent movements were largely led by currency
markets, as investors fretted over economic uncertainty after
governments and central banks pumped massive liquidity to
battle recession.
                                
 Platinum and palladium also pared gains after reaching
their highest in more than a year, buoyed by earlier strength
in gold prices and supply concerns.
                                
 Spot gold <XAU=> at $1,056.60 an ounce at 2:59 a.m. EDT
(1859 GMT), against $1,062.70 late in New York on Monday.
Earlier the precious metal touched a session high of $1,067.70
an ounce, close to the record high of $1,070.40 it hit last
week.
                                
 U.S. December gold futures <GCZ9> settled up 50 cents at
$1,058.60 an ounce on the COMEX division of the New York
Mercantile Exchange.
                                
 Gold is closely tracking the euro-dollar exchange rate, a
trend analysts say is likely to ultimately lead it back
upwards.
                                
 "The gold market really comes down to where you think the
dollar is going," said Citigroup analyst David Thurtell. "We
are still pretty bearish on the dollar, so that makes us
favorable to gold."
                                
 "People are worried about debt issuance by governments,
inflation problems. It only takes a small allocation of fund
portfolios to gold to really lift the market. The gold market
is tiny compared to the bond and equity markets."
                                
 The euro relinquished early gains to trade lower against
the dollar after options-related barriers kept it from breaking
above $1.50. [FRX/]
                                
 TECHNICAL SUPPORT
                                
 Gold is technically well placed to build on the 6 percent
gains it has posted in the last month, said analysts who study
charts of past price movements.
                                
 But some market watchers believe weakness in gold's
underlying supply and demand fundamentals puts it at risk of a
correction.
                                
 GE Asset Management portfolio manager Nicholas Koutsoftas
told Reuters he felt the metal was overvalued at current
levels, given a dearth of physical demand. [ID:nLK595996]
                                
 Jonathan Jossen, a COMEX floor trader, said that prices and
volatility of gold options have been falling, indicating that
the underlying gold futures could range-bound.
                                
 "We are in no man's land. Nobody thinks we are going to
explode. They don't feel that we are going to have a breakout
move up $50."
                                
 There has been little reported gold buying by
bullion-backed exchange-traded funds -- a major driver of
prices in the first quarter of 2009 -- with holdings of the
largest, the SPDR Gold Trust <GLD>, unchanged for an eighth day
on Monday. [GOL/SPDR]
                                
 Jewelry buying in India, the world's biggest gold consumer
last year, was also lackluster as festival season ended.
                                
 Spot silver <XAG=> was at $17.53 an ounce against $17.78.
                                
 Platinum and palladium both rose to their highest in more
than a year, with platinum hitting a 13-month high of $1,376 an
ounce and palladium reaching a peak of $339.50, its firmest
since August 2008.
                                
 Spot platinum <XPT=> was at $1,347 an ounce against
$1,355.50, while palladium <XPD=> was at $334.50 against its
previous session's late quote of $332.
                                
                      Close  Change   Pct     2008    YTD
                                
                                      Chg   Close   % Chg US
gold      <GCZ9>    1058.60     0.5   0.0   884.3    19.7 US
silver    <SIZ9>     17.558  -0.067  -0.4  11.295    55.4 US
platinum  <PLF0>    1356.30   -7.90  -0.6  941.50    44.1 US
palladium <PAZ9>     337.65    3.25   1.0  188.70    78.9
 Prices at 2:59 p.m. EDT (1859 GMT) Gold         <XAU=>   
1056.55   -6.15  -0.6  878.20    20.3 Silver       <XAG=>     
17.53   -0.25  -1.4   11.30    55.1 Platinum     <XPT=>   
1347.00   -8.50  -0.6  924.50    45.7 Palladium    <XPD=>    
334.50   2.500   0.8  184.50    81.3 Gold Fix     <XAUFIX=>
1061.75   -2.25  -0.2  836.50    26.9 Silver Fix   <XAGFIX=>  
17.76   23.50   1.3   14.76    20.3 Platinum Fix <XPTFIX=>
1371.00   12.00   0.9    1529   -10.3 Palladium Fix<XPDFIX=> 
339.00    5.00   1.5   365.0    -7.1
 (Reporting by Frank Tang and Jan Harvey; Editing by Marguerita
Choy)