* Upbeat economic view lifts cyclical assets, pressures gold
* Egypt unrest lends support as Chinese buying stalls
* Palladium flirts with 10-year high after car sales rise
* Coming up: U.S. ADP employment data at 1315 GMT
(Updates prices)
By Jan Harvey
LONDON, Feb 2 (Reuters) - Gold prices eased a touch in
Europe on Wednesday after well received U.S. economic data and a
spate of upbeat corporate earnings deflected interest away from
bullion on to higher-risk, higher-yielding assets.
Concerns over unrest in Egypt and the prospects that it
could spread into the wider Middle East are continuing to prompt
some buying of gold as a haven from risk, but slackening
investment interest in the metal is outweighing that for now.
Spot gold <XAU=> was bid at $1,333.20 an ounce at 1235 GMT,
against $1,340.45 late in New York on Tuesday. U.S. gold futures
for April delivery <GCJ1> fell $6.30 an ounce to $1,334.00.
"We still think there are reasons to see higher gold prices
through this year, but right now the slew of positive macro data
particularly coming out of the United States ... is all very
encouraging (for the wider economy)," said Societe Generale
analyst David Wilson.
"It seems to be that the positive global macro data is
balancing regional risk from Egypt."
World stocks hit 29-month highs on Wednesday, with strong
factory data pointing to sustained global economic recovery and
positive corporate earnings fuelling gains. []
European shares also rose as corporate earnings continued to
underpin investor risk appetite while U.S. stock index futures
were little changed after the Dow and S&P advanced to their
highest close in about 2-1/2 years on Tuesday. [] []
While cyclical assets have benefited from a more positive
view of the economic outlook, gold has not, analysts said.
"Investors are still reluctant to jump back on the market,
expecting little upside for gold should risk aversion retreat,
while major central banks will eventually have to turn back to
tackling inflation and reducing liquidity," said VTB Capital.
Traders will be closely watching U.S. employment data due at
1315 GMT for further signs of recovery.
EGYPT LENDS SUPPORT
Concerns over unrest in Egypt continued to support gold
prices, however.
The European Union called Egyptian President Hosni Mubarak's
decision not to stand for re-election a step in the right
direction on Wednesday, but said his new cabinet did not
constitute a representative government. []
Mubarak's decision had angered protesters who want an
immediate end to his 30-year rule and prompted the United States
to say change "must begin now". []
"Political turmoil in Egypt couldn't have come at a better
time for gold," said UBS in a note. "With demand from China, the
largest physical consumer of late, slowing into the Lunar New
Year, geopolitical risk has provided a new support."
"Not that events in Egypt have injected a premium into the
gold price - they have not - but they have kept more weak longs
from liquidating and induced some short-covering."
Meanwhile gold priced in sterling <XAUGBP=R> fell to its
lowest since late September as the pound hit a three-month low
versus the dollar. []
Among other precious metals, palladium prices rose towards
their highest in nearly a decade after a raft of upbeat car
sales numbers. Like platinum, the majority of palladium is
consumed by car manufacturers for use in catalytic converters.
General Motors Co <GM.M> and Chrysler posted U.S. sales
gains of more than 20 percent for January, while U.S. auto sales
rose 17 percent, a sign that the consumer-led recovery remained
on track. []
Platinum <XPT=> was at $1,822.49 an ounce against $1,825,
while palladium <XPD=> was at $816.72 against $819.47. Silver
<XAG=> was bid at $28.24 an ounce against $28.49.
(Reporting by Jan Harvey; Editing by Alison Birrane)
