* Dollar holds gains versus euro after Friday's rally
* Oil, equities decline as caution sets in
* ETFS Physical Palladium holdings up 2.7 percent to record
(Updates throughout, changes dateline-previous TOKYO)
By Jan Harvey
LONDON, Aug 10 (Reuters) - Gold prices held near $955 an
ounce in Europe on Monday as the dollar steadied against the
euro after the previous session's rally, with a dearth of demand
for physical bullion limiting fresh price gains.
Spot gold <XAU=> was bid at $954.45 an ounce at 0858 GMT,
against $953.80 an ounce late in New York on Friday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange fell $2.50 to $957 an ounce.
The precious metal eased on Friday as the dollar firmed
against the euro in the wake of better-than-expected U.S. jobs
data for July.
"Gold is not reacting to commodity-specific or gold-specific
news, but rather is being driven by macroeconomic (factors),"
said Commerzbank analyst Eugen Weinberg. "The most important of
these is the euro/dollar."
The dollar was little changed against the euro and a basket
of six major currencies, holding onto last week's gains. A soft
dollar makes gold cheaper for holders of other currencies, and
boosts interest in hard assets such as bullion. []
European stocks edged down meanwhile, despite a strong
session in Asia, as banking shares and commodity stocks led the
main index lower after four weeks of gains. []
Investors are reluctant to add significant risk to their
portfolio after Friday's broad rally sparked by the July U.S.
jobs report, which was seen as a clear indication the economy is
turning around from a deep recession. []
Oil prices edged down as equity market weakness tempered
optimism over the prospects for an economic recovery. Rising
crude prices can boost interest in bullion as a hedge against
oil-led inflation. []
SOFT DEMAND
Physical demand for gold remained soft, meanwhile, with the
world's largest bullion-backed exchange-traded fund, the SPDR
Gold Trust <GLD>, reporting a 3.97-tonne outflow on Friday.
The fund's gold holdings have declined more than 40 tonnes
in the last four weeks. []
"With physical demand very low and ETF investors carrying
out further pockets of redemptions, (gold) is reliant on further
fund/speculative buying to fuel rallies," said James Moore, an
analyst at TheBullionDesk.com.
The metal is also taking support from the signing of a new
Central Bank Gold Agreement to limit official sector gold sales.
While a third pact was expected, the cut in the sales ceiling to
400 tonnes from 500 is lending support to prices, analysts said.
Among other precious metals, silver <XAG=> was at $14.48 an
ounce against $14.59, tracking gold. Platinum <XPT=> was at
$1,247 an ounce against $1,261.50, while palladium <XPD=> was
flat at $273.
South Africa's biggest union said on Saturday it is
considering a wage offer from state power firm Eskom after talks
last week to avert a strike that could crippled the republic.
[]
South Africa is the world's biggest platinum miner,
producing around four-fifths of global supply of the metal, and
the second largest producer of palladium after Russia.
Palladium took support from news that ETF Securities' ETFS
Physical Palladium fund, which is backed by physical stocks of
the metal, added more than 9,000 ounces to its holdings,
bringing them to a record 351,440 ounces. []
(Reporting by Jan Harvey; Editing by Anthony Barker)
