* Dollar edges lower vs euro ahead of U.S. GDP data
* Demand for physical gold returns after price slip
* ETF Securities sees platinum, palladium buying
(Updates throughout, changes dateline from TOKYO)
By Jan Harvey
LONDON, Oct 29 (Reuters) - Gold prices rose back above
$1,030 an ounce in Europe on Thursday as the dollar gave up
gains against the euro ahead of key U.S. economic growth data
due later in the session.
Some physical demand is returning to the market as prices
plumb three-week lows, dealers said, helping the metal shrug off
a further small outflow from the world's largest gold-backed
exchange-traded fund.
Spot gold was bid at $1,034.65 an ounce at 1014 GMT, against
$1,026.85 late in New York on Wednesday. Earlier it touched a
three-week low of $1,025.75 an ounce.
"Some stabilisation in the U.S. dollar overnight has helped
gold, and we have some decent interest in the physical side,"
said Walter de Wet, an analyst at Standard Bank. "We see some
base-building going on."
"Our view is that we are going to see a general trend for
dollar weakness in the next quarter," he added.
The euro <EUR=> edged higher against the dollar as the
market took a breather ahead of U.S. gross domestic product data
at 1230 GMT, which is expected to show the world's largest
economy returned to growth in the third quarter. []
A weak reading could undermine confidence in the global
economy, potentially prompting selling of higher-yielding
currencies in favour of the dollar, hurting gold, analysts said.
On the wider markets, European shares turned positive after
a choppy start, while world stocks hit another three-week low on
Thursday as disappointing Europenan corporate results and weak
U.S. data fuelled concerns over the economy. []
Oil prices meanwhile firmed above $77 a barrel, making up
some lost ground after the previous session's 2.6 percent
decline, as investors awaited the U.S. data. []
Strength in crude prices often helps gold, as it supports
interest in commodities as an asset class, and because bullion
is sometimes viewed as a hedge against oil-led inflation.
PRICES TEMPT
On the physical side of the market, gold traders in major
bullion consumer India continued to stock up for the wedding
season, tempted by the recent price decline. []
"Traders have responded well to the recent correction after
Diwali, and a lot of orders are getting filled," said Pinakin
Vyas, chief-manager treasury of Mumbai's IndusInd Bank.
On the investment side, New York's SPDR Gold Trust <GLD>
reported an outflow of a further 1.22 tonnes on Wednesday, the
third such sale this week. []
Standard Bank's de Wet said the fact that gold is managing
to hold at such elevated levels despite fairly weak investment
demand suggested a return to dollar weakness could result in a
fresh move higher.
In supply news, Gold Fields <GFIJ.J>, the world's fourth
largest gold producer, said power tariff hikes proposed by
utility Eskom would have a big impact on its business, but could
not say if it would have to shut any shafts. []
Elsewhere Interfax news agency on Thursday quoted a Finance
Ministry official as saying the Russian government plans to sell
25 tonnes of gold. []
Among other precious metals, spot silver <XAG=> was bid at
$16.32 an ounce against $16.09, tracking gold higher after the
previous session's 3.3 percent decline.
Platinum <XPT=> was at $1,316.50 an ounce against $1,303.50,
while palladium <XPD=> was at $317 against $313.50.
ETF Securities said it saw a 6,401 ounce or 1.7 percent
inflow into its ETFS Physical Platinum <PHPT.L> exchange-traded
commodity on Wednesday, while holdings of its ETFS Physical
Palladium <PHPD.L> ETC rose nearly 1 percent to record levels.
(Reporting by Jan Harvey; Editing by David Brough)
