* Initial crude rally, chart-based support lift gold
* Dollar sharp gains vs euro curbs further upside
* Weak physical demand could put damper on gold's rise
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Michael Taylor
NEW YORK/LONDON, Jan 13 (Reuters) - Gold recovered from
one-month lows set the previous session to finish slightly
higher on Tuesday, helped by initial oil gains and chart-based
support in spite of a dollar rally against the euro.
"I think that the gold market is oscillating between
worries about disinflation, and its strength as a safe haven,"
said James Steel, chief commodity analyst at HSBC. Steel cited
crude oil's rally and the modest strength of the dollar in
early sessions for gold's rise.
Gold <XAU=> was at $819.95 an ounce at 1:48 a.m. EST (1848
GMT), up 0.9 percent compared with Monday's last trade of
$819.35. Bullion tumbled to a one-month low of $813.80.
Gold prices have now fallen around 6 percent so far in
January, after rising 8 percent in December.
U.S. gold futures for February delivery <GCG9> settled down
30 cents at $820.70 an ounce on the COMEX division of the New
York Mercantile Exchange.
The dollar was broadly firmer, 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 euro broke below 1.32 against the dollar. []
The ECB is expected to cut key interest rates by 50 basis
points to 2 percent, a Reuters analysts poll said.
[]
"You see the euro down big today, and gold is still holding
its own," said Mihir Dange, a COMEX gold floor trader. Dange
said that consolidation could be seen in February gold futures,
which found chart support at the area between $814 and $815.
An initial rally in U.S. crude futures <CLc1> supported
gold. Oil rose over $1 toward $40 per barrel in the early
sessions on reports of an output cut by Saudi Arabia, but
prices pared some of the gain. []
Gold prices were also boosted by buying interest from
jewelers in Asia ahead of the Lunar New Year holidays later
this month, dealers said. However, weak physical demand could
still put a damper on bullion's rise.
"The market has rallied up quite a lot in the last
fortnight," Eugen Weinberg, a commodity analyst at Commerzbank,
said.
"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," Weinberg said.
RUSSIA GOLD SUPPLY ON THE RISE
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.
However, physical demand, a key determinant of sentiment
and prices, is seen coming under pressure in the near term,
traders and analysts said.
On the supply side, Russian Gold Industrialists Union, the
country's main industry lobby, said Russia's gold output should
rise this year by 8 percent to 176 tonnes after five years of
decline. []
In other metals, platinum <XPT=> was quoted at $939.50 an
ounce, down 1.7 percent from its last finish of $956.00.
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. []
Silver <XAG=> was quoted at $10.69 an ounce, up 0.7 percent
from its previous session close of $10.62, while palladium
<XPD=> was at $182.00 an ounce, 1.4 percent lower than its
previous close on Monday of $184.00.
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Christian Wiessner)
