* Dollar at session lows versus euro after JPMorgan earnings
* Physical gold demand still lacklustre on seasonal weakness
* Reuters precious metals price poll shows fresh optimism
(Releads, updates prices)
By Jan Harvey
LONDON, July 16 (Reuters) - Gold pared losses on Thursday as
the euro hit session highs against the dollar, with a rise in
European equities after strong earnings from JPMorgan <JPM.N>
boosting appetite for currencies seen as higher risk.
Spot gold <XAU=> was bid at $938.05 an ounce at 1103 GMT,
against $938.45 an ounce late in New York on Wednesday. Earlier
it touched a low of $934.30.
"For the majority of the day gold traders will be looking at
the euro-dollar price," said Michael Blumenroth, a trader at
Deutsche Bank. "That is the main driver at the moment of the
gold price."
The euro rose to a session high versus the dollar after
forecast-beating earnings from JPMorgan boosted risk appetite. A
weaker dollar boosts interest in gold as a currency hedge and
makes the metal cheaper for other currency holders. []
Investors are waiting for a further raft of earnings due out
in the United States on Friday, with Citigroup <C.N>, General
Electric <GE.N> and Bank of America <BAC.N> all due to release
figures.
European shares climbed and U.S. stock futures turned
positive after the JPMorgan results. Other commodity prices also
cut losses but remained soft, with oil down nearly 1 percent on
the day. [] [] []
Physical demand for gold was still tepid, keeping a lid on
gains. Gold prices in India were supported by the weak rupee,
but buyers stayed away during a seasonally weak period for
sales. []
Holdings of the largest gold ETF, the SPDR Gold Trust <GLD>
were unchanged on Wednesday, while ETF Securities' Gold Bullion
Securities ETF <GBS.L> saw a small outflow. []
FRESH OPTIMISM
A poll of 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 taken from the poll rose 7.8
percent in that period to $930 an ounce, while the expected
silver price rose by 18 percent.
"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 $1,151.50 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 William Hardy)
