* Hopes downturn is bottoming boosts stocks
* India buys more gold than expected for Akshaya Tritya
* ETF Securities silver ETF adds 250,000 ounces
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By Jan Harvey
LONDON, April 30 (Reuters) - Gold fell nearly 2 percent in
Europe on Thursday as disappointment over its failure to hold
above $900 an ounce and the dollar's turn higher against the
euro sparked fund selling of the precious metal.
A recovery in the stock markets is also denting interest in
bullion as a haven from risk, traders said.
Spot gold <XAU=> was bid at $882.65 an ounce at 1252 GMT,
against $897.60 an ounce late in New York on Wednesday.
Afshin Nabavi, head of trading at MKS Finance SA, said gold
had been pressured by the lack of a break above resistance at
$900, a decline in the euro and firmer stock markets.
"We are still trading in a range of $880-$900," he said.
The dollar recovered early losses against the euro on
Thursday, with the U.S. currency turning positive against the
euro after U.S. weekly jobless claims fell 14,000 last week.
[]
Gold is often bought as an alternative asset to the U.S.
currency, and usually moves in the opposite direction to it.
Global stocks touched a four-month high on Wednesday on
hopes for an improvement in the U.S. economy. European shares
rose as a wave of blue chip earnings boosted optimism.
[] []
A recovery in the equity markets has pressured gold, as
investors sell the precious metal to buy stocks. Hopes the
downturn may be bottoming out are likely to continue boosting
equities, further weighing on gold, analysts said.
The Federal Reserve said after a meeting on interest rates
on Wednesday the U.S. economic contraction seemed to be slowing,
cheering traders even as data showed the world's largest economy
shrank sharply in the first quarter. []
"Any more positive economic sentiment will put downward
pressure on gold again, at least in the short term," Societe
Generale metals analyst David Wilson said.
INDIAN GOLD SALES
On the demand side, the World Gold Council reported Indian
gold sales ahead of the key festival of Akshaya Tritya earlier
this week were down 8 percent from a year ago, much higher than
estimates from a local trade body and jewellers. []
On the investment side, holdings of the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
were unchanged for a fourth session on Wednesday.
The trust's gold assets have fallen 23 tonnes month on
month, against a rise of more than 98 tonnes in the preceding
four weeks.
Losses in gold pressured other precious metals, with silver
<XAG=> slipping more than 2 percent to $12.37 an ounce against
$12.76.
But ETF Securities said holdings of its silver-backed
exchange-traded commodity <PHAG.L> rose 250,000 ounces or 1.4
percent on Wednesday.
Elsewhere, spot platinum <XPT=> was bid at $1,088.50 an
ounce against $1,094.50, while palladium <XPD=> was bid at $220
an ounce against $215.50, pressured by the drop in gold.
Platinum dropped into negative territory amid news that U.S.
carmaker Chrysler will proceed with Chapter 11 bankruptcy
protection. The car industry is the main consumer of platinum
group metals. []
(Editing by James Jukwey)
