* Risk appetite ebbs ahead of U.S. earnings; dollar firms
* Equities, oil, base metals prices decline
* Reuters precious metals price poll shows fresh optimism
(Updates throughout, changes dateline-pvs TOKYO)
By Jan Harvey
LONDON, July 16 (Reuters) - Gold prices slipped in Europe on
Thursday as the firmer dollar prompted investors to cash in
gains after the precious metal posted its biggest one-day rise
since July 1 in the last session.
Spot gold <XAU=> was bid at $935.10 an ounce at 0935 GMT,
against $938.45 an ounce late in New York on Wednesday.
The precious metal rose to a two-week high on Wednesday as
the dollar tumbled after data showed U.S. consumer prices rose
faster than expected in June, boosting gold's appeal as a
currency hedge.
But those gains could not be sustained as the U.S. currency
bounced back against the euro, with investors cautious ahead of
a spate of U.S. corporate earnings.
"For the majority of the day gold traders will be looking at
the euro-dollar price. That is the main driver at the moment of
the gold price," said Michael Blumenroth, a trader at Deutsche
Bank. "People will be tempted to take profits."
The dollar rose against the euro <EUR=> in early trade as
the risk appetite that emerged in the last session ebbed, with
European shares falling after three days of gains. [] []
Investors are nervous ahead of a raft of earnings due out in
the United States, with JPMorgan <JPM.N> reporting on Thursday
and Citigroup <C.N>, General Electric <GE.N> and Bank of America
<BAC.N> due to release figures on Friday.
Caution spilled over into the commodities markets, with
industrial metals trending broadly lower and oil prices edging
down as investors worried about the pace of global recovery.
[] []
FRESH OPTIMISM
A poll of the precious metals price forecasts conducted by
Reuters showed sentiment towards the assets has improved since
the last such survey in January. []
The average 2009 gold forecast collated from the poll rose
7.8 percent in that period to $930 an ounce, while the expected
silver price rose by 18 percent. Platinum and palladium price
forecasts were also on average considerably higher.
"The major factor for the precious metals markets will be
the recovery of the global economy and inflation fears," said
Peter Fertig, a consultant at Quantitative Commodity Research.
"The U.S. dollar is traditionally weak in the fourth
quarter, which should help precious metals in the final quarter
of this year. Fund buying might be the dominating factor for
gold and silver in this period."
Platinum prices forecasts were on average 17 percent higher
than in January, at $1,130 an ounce in the full year, while the
average palladium forecast was up nearly 10 percent to $230.
Both metals are expected to benefit from the improving
outlook for the car industry, though industrial demand for the
metals used in autocatalysts is not expected to recover
significantly until 2010.
Platinum <XPT=> was at $1,151 an ounce against $1,156, while
palladium <XPD=> was at $243 against $244.50 and silver <XAG=>
was at $13.19 an ounce against $13.25.
(Reporting by Jan Harvey; Editing by Jon Boyle)
