* Euro hits session highs vs the dollar after European data
* Oil prices turn higher as stocks recover
(Updates throughout, previous TOKYO)
By Jan Harvey
LONDON, July 24 (Reuters) - Gold rose back above $950 an
ounce in Europe on Friday as the dollar weakened versus the euro
after better-than-expected European economic data.
However, gains were capped by strong technical resistance
and ongoing weakness in jewellery and investment demand for the
metal, traders said.
Spot gold <XAU=> was bid at $950.80 an ounce at 0914 GMT,
against $947.15 an ounce late in New York on Thursday.
Afshin Nabavi, head of trading at Geneva's MKS Finance, said
the metal was stuck in a range between $945-960 an ounce.
"A move above $960 or below $940 ought to bring along some
fresh interest, otherwise quiet is the name of the game," he
said. "Physical demand seems to remain lacklustre."
Gold prices are closely tracking moves in the foreign
exchange markets. When the dollar moves lower, gold becomes
cheaper for holders of other currencies.
The U.S. unit weakened against the euro on Friday, moving to
session lows after a stronger-than-expected estimate of the
German Purchasing Managers' index and improved surveys on the
euro zone services and manufacturing sectors. []
European shares also turned higher after the data, boosting
oil prices 0.5 percent. But while the currency markets and
strength in crude prices are supportive of gold, underlying
demand weakness is preventing further gains. [] []
BUYERS AT BAY
A rise in Indian gold prices above 15,000 rupees per 10
grams is keeping buying there at bay. "Traders feel
uncomfortable to bid gold at 15,000 rupees," a Mumbai-based
dealer said. []
A Reuters poll released Friday showed Indian gold prices are
expected to ease by end-September as the rupee is likely to
strengthen and domestic demand may be subdued. []
Last year India was the biggest gold jewellery consumer in
the world, accounting for nearly 475 tonnes of sales, according
to metals consultancy GFMS.
Investment demand was lacklustre, with holdings of the
world's largest gold exchange-traded fund, the SPDR Gold Trust
<GLD>, stable on Thursday after two days of outflows. []
Analysts who study historical chart patterns to determine
future price moves say the precious metal is also facing tough
technical resistance below $960 an ounce.
"The formidable resistance at the $957-$961 zone is getting
stronger with the pass of every session, and that has been
curbing the metal from witnessing any sustained gains," said
Richcomm Global Services in a note.
Among other precious metals, silver <XAG=> was at $13.77 an
ounce against $13.70, platinum <XPT=> at $1,177.50 an ounce
against $1,174, and palladium <XPD=> at $255 against $255.50.
Gains in equity markets are helping to support gains in
platinum, which is primarily industrial in use.
"Resistance at $1,200 is once again in sight, especially on
a breach of $1,180 and provided sentiment remains upbeat," said
VTB Capital in a note.
Unrest continued in South Africa, source of four-fifths of
the world's platinum and the third largest producer of gold.
South African president Jacob Zuma said police will crack down
on rioters after violent protests this week. []
(Editing by James Jukwey)
