* Fresh buying supports gold after 1.2 pct price slide
* Euro remains depressed by debt worries
* SPDR gold ETF sees 0.609-tonne outflow on Wednesday
(Updates prices, adds comment)
By Jan Harvey
LONDON, March 11 (Reuters) - Gold edged lower in Europe on
Thursday as the dollar firmed against the euro, though the metal
was supported by fresh buying interest due to lower prices after
a 1.2 percent price fall in the last session.
Palladium slid 3 percent and platinum and silver fell after
a rise in Chinese inflation data to 16-month highs fuelled
expectations the Asian nation may move to curb growth, knocking
industrial commodities.
Spot gold <XAU=> was bid at $1,107.90 an ounce at 1010 GMT,
against $1,107.85 late in New York on Wednesday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange rose 10 cents to $1,108.20.
The euro <EUR=> softened against the dollar, giving up some
of the previous session's gains. Strength in the U.S. unit curbs
gold's appeal as an alternative asset and makes dollar-priced
commodities more expensive for other currency holders. []
"Gold is struggling because we have a stronger dollar, and
there has been very little inflow into exchange-traded funds,"
said Deutsche Bank's head of commodity research Michael Lewis.
Data showed holdings of the world's largest gold-backed ETF,
New York's SPDR Gold Trust <GLD>, fell by 0.609 tonnes on
Wednesday, almost the same amount by which they rose at the end
of last week. []
Prices have found good technical support at around $1,104 an
ounce, and the metal has run into solid buying interest on the
dips as investors take advantage of low prices.
"Demand is certainly visible in the $1,101-1,105 range, and
that is probably helping the metal for a immediate crash," said
Pradeep Unni, senior analyst at Richcomm Global Services. "We
hear there are lot of buy orders at levels below $1,100."
Persistent fears over sovereign debt issues in peripheral
euro zone economies like Greece and Spain are keeping the single
currency under pressure, however.
Usually the resulting upward pressure on the dollar would
push gold lower, but those sovereign risk issues are also
supporting demand for the metal as a safe store of value.
"As long as we don't find any clarity with respect to Greece
and neighbouring nations, gold will continue to fight bearish
pressure," Unni added.
SOUTH AFRICAN OUTPUT FALLS
In supply news, South Africa's statistics service said the
country's gold output fell 18.2 percent year-on-year in January.
The republic was the world's second-largest gold miner last year
behind China, according to the World Gold Council. []
Among other commodities, oil fell below $82 from the
eight-week high it hit a day ago on expectations that OPEC will
pump above quotas in the second quarter, and as Chinese economic
data rekindled concern of tighter monetary policy. []
Industrial metals slipped as production and inflation data
from China stoked investor concerns of further monetary
tightening in the world's top metals consumer. []
Similar concerns knocked the industrial precious metals
lower. Autocatalyst material palladium <XPD=>, which last week
benefited from strong Chinese car sales data, was the biggest
faller, sliding nearly 3 percent to $449 against $461.50.
The metal has now surrendered all of last week's gains,
which took it to two-year highs at $480 an ounce, as investors
booked profits from the rally.
"Chart support is expected at $1,565/45 in platinum and
between $444-50 in palladium," said James Moore, an analyst at
TheBullionDesk.com.
Platinum <XPT=> was at $1,584.50 an ounce against $1,592,
also retreating from the previous session's seven-week highs.
Silver <XAG=> was bid at $17.00 an ounce against $16.97, well
off the seven-week high of $17.62 it hit on Wednesday.
(Editing by James Jukwey; editing by Sue Thomas)
