* Dollar index <.DXY> rises as risk appetite wanes
* Gold remains supported by inflation fears, cenbank buying
* Rhodium, ruthenium prices surge in catch-up
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, Nov 20 (Reuters) - Gold slipped lower in Europe on
Friday as the dollar firmed, dampening the momentum which has
lifted prices more than 9 percent this month after reports of
central bank gold buying.
Spot gold <XAU=> was bid at $1,138.60 an ounce at 1434 GMT,
against $1,143.50 late in New York on Thursday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange fell $3.00 to $1,138.90.
India's acquisition of 200 tonnes of bullion from the IMF
boosted interest in gold earlier this month. The impetus from
the move pushed gold through key technical resistance levels,
taking gold to a record $1,152.75 an ounce on Wednesday.
The metal may be due a correction after this month's sharp
price rise, analysts said, but in the longer term it is likely
to resume its climb.
"The perception is very positive now because of central
banks buying gold, but they are buying it off the market. It
doesn't change global holdings of the central banks," said
Wolfgang Wrzesniok-Rossbach, head of sales at Heraeus.
"It gives some support, but I think gold has moved too much
in too short a period of time.
"That said, it doesn't mean there is not an underlying
uptrend," he added. "It is there, and it is intact even if gold
falls to $1,075 or $1,025."
Prices are being capped by strength in the dollar index
<.DXY> which firmed 0.64 percent on Friday as investors shed
riskier investments. European shares fell for a fourth session,
and U.S. stocks declined at the open. [] [] []
Strength in the U.S. unit weighs on gold, as it cuts its
appeal as an alternative asset and makes dollar-priced
commodities more expensive for holders of other currencies.
"The dollar index is hovering above the 75 zone and that
strength is keeping the lid on gains," said Pradeep Unni, senior
analyst at Richcomm Global Services.
"At the moment it looks like gold is awaiting the next big
clue for a further push beyond $1,154, as current fundamentals
seem to have been totally factored into the price."
INFLATION HEDGE
Analysts said gold was likely to take support from interest
in the metal as a hedge against inflation, which some fear will
hit the markets longer term as a result of money flooding into
economies via quantitative easing.
Andrew Cole, manager of the Baring Multi Asset Fund, told
Reuters on Thursday that gold could hit new highs this year and
next as investors look for an inflation hedge. []
Though some analysts have said such buying of gold is
premature, JPMorgan commented that "with respect to golden
portfolio protection; remember the time to purchase insurance is
before your house catches fire."
Silver <XAG=> was at $18.23 an ounce against $18.51. Metals
consultancy GFMS said on Thursday the metal may rise above $20
an ounce as surging investment more than offsets a drop in
fabrication demand. []
Platinum <XPT=> was at $1,430.50 an ounce against $1,441.50,
while palladium <XPD=> was at $356.50 against $366.
Fellow platinum group metal rhodium <RHOD-LON> rose to a
fresh 13-month high of $2,675 an ounce on Friday, lifted by
speculative demand in anticipation of a bounce in car sales.
Ruthenium <RUTH-LON> meanwhile jumped 23.5 percent to $105
an ounce, tracking gains in other platinum group metals this
year, as investors sought out hard assets.
"The other platinum group metals have been moving very
sharply, and ruthenium didn't move with them," said a minor
metals trader. "There is a general flight of money into metal...
people feel paper is going to be worth less."
(Editing by Keiron Henderson)
