* U.S. crude turns positive - at $38 a barrel
* Stronger dollar curbs further upside
(Releads, updates prices, adds comment)
By Michael Taylor
LONDON, Jan 13 (Reuters) - Gold recovered from one-month
lows to tick higher on Tuesday buoyed by rising oil prices and
bargain hunting, but a firmer dollar capped further gains.
Gold <XAU=> was quoted at $826.10/$828.10 an ounce at 1455
GMT, up from $819.35 an ounce in New York late on Monday and off
a one-month low of $813.80 an ounce.
Gold prices have fallen around 6 percent so far in January,
after rising 8 percent in December.
"The longer term picture still looks quite positive for gold
-- given that we expect oil prices to pick up towards the end of
the year," said Suki Cooper, a precious metals analyst at
Barclays Capital. "In the near-term it's very much tracking
currency movements."
"Prices are likely to remain under pressure in the
near-term, amid bouts of dollar strength."
The dollar was broadly firm, hitting one-month highs against
the euro, as struggling equity markets cranked up demand ahead
of a European Central Bank policy meeting on Thursday. []
The ECB is expected to cut key interest rates by 50 basis
points to 2 percent, a Reuters analysts poll said.
[]
Providing support, U.S. crude <CLc1> advanced towards $39 a
barrel and retreating back from its lowest level in three weeks.
[]
A firmer dollar tends to pressure gold, which is often
bought as an alternative asset to the U.S. currency, while
stronger oil prices increase gold's appeal as a hedge against
inflation.
Gold prices were also boosted by buying interest from
jewellers in Asia ahead of the Lunar New Year holidays later
this month, dealers said.
"The market has rallied up quite a lot in the last
fortnight," Eugen Weinberg, a commodity analyst at Commerzbank,
said. "We had short-covering ... index funds talking about
re-weighting things and people got excited.
"Now we are back to reality where there is no demand and the
market is drifting. We are coming back to where we should be in
the first place."
GOLD FALLS
The precious metal has bounced more than 20 percent since
falling to a 13-month low around $680 in late October. It hit an
all time high of $1,030.80 an ounce last March.
Also helping sentiment, Benguet Corp <BC.PS>, the
Philippines' fourth-biggest miner by market value, said it
suspended exploration at a copper-gold project on the island of
Mindanao due to a dispute with a local partner. []
That was offset by Yamana Gold Inc <YRI.TO>, which said it
would spend up to $350 million this year and $400 million in
2010 to boost production, while halving its dividend to help
fund its expenditures. []
However, physical demand, a key determinant of sentiment and
prices, is seen coming under pressure over the next three
months.
"Reports of low physical demand from the key demand centres
continues to be reported and this might extend for the next
couple of months," Richcomm Global Services said in a note.
Platinum <XPT=> was quoted at $935.00/$940.00 an ounce, down
from $956.00 at the New York close.
Falling car sales in China added to the gloomy outlook for
the auto industry, the largest user of platinum. Car sales
fell 8 percent in December from the previous year, the
country's official industry association said. []
"We are looking for an opportunity to turn tactical buyers
of gold -- but need to see jewellery and/or physical investment
demand recover ... before we will do so," UBS said in a note.
New York gold futures <GCZ9> were at $831.80 an ounce in
electronic trading, 0.6 percent higher.
Silver <XAG=> was trading at $10.59/$10.67 an ounce versus
$10.62 an ounce on Monday, while palladium <XPD=> was at
$182.00/$187.00 from $184.00.
(Additional reporting by Lewa Pardomuan; editing by xx)
