* 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
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By Jan Harvey
LONDON, July 16 (Reuters) - Gold was steady on Thursday as
weakness in physical demand for the precious metal was offset by
a slide in the value of the dollar versus the euro, which
boosted its appeal as a currency hedge.
The dollar sank to day lows against the euro as data showing
U.S. jobless claims fell and strong earnings from JPMorgan
<JPM.N> boosted appetite for currencies seen as higher risk.
[]
Spot gold <XAU=> was bid at $938.30 an ounce at 1303 GMT,
versus $938.45 an ounce late in New York on Wednesday. U.S. gold
futures for August delivery <GCQ9> on the COMEX division of the
New York Mercantile Exchange dipped $1.10 to $938.30 an ounce.
"I am surprised gold is at this high level, given the lack
of demand," said Commerzbank analyst Carsten Fritsch. "We have
seen outflows from the SPDR of 15 tonnes on Tuesday alone, and
there is still lacklustre jewellery demand."
"The only factor supporting gold is dollar weakness," he
said. A softer dollar typically boosts interest in bullion as a
currency hedge and makes it cheaper for other currency holders.
The metal reversed early losses but failed to break through
strong resistance under $940 an ounce, with a dearth of demand
for jewellery and bullion to back exchange-traded funds capping
gains.
Indian gold prices 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. [] []
EARNINGS DUE
Investors are awaiting a further raft of earnings due 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 after the JPMorgan results, led by
financial stocks. Other commodities also cut losses but remained
soft, with oil down nearly one percent on the day. [] []
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.
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.
While both metals are expected to benefit from the improving
outlook for car sales, industrial demand for the metals used in
autocatalysts is not expected to recover until 2010.
Platinum <XPT=> was at $1,162 an ounce against $1,156, while
palladium <XPD=> was at $245 against $244.50 and silver <XAG=>
was at $13.22 an ounce against $13.25.
(Reporting by Jan Harvey; Editing by Jon Boyle)
