* Gold prices slip as $950 support crumbles
* Dollar holds gains versus euro after Friday's rally
* ETFS Physical Palladium holdings up 2.7 percent to record
(Releads, adds comment, updates prices)
By Jan Harvey
LONDON, Aug 10 (Reuters) - Gold fell more than 1 percent to
a one-week low of $942.00 an ounce on Monday as liquidation of
long positions on New York's COMEX futures market triggered a
wave of automatic sell orders, taking spot prices below $950.
Speculative net long positioning on COMEX rose last week to
just below the year high seen in June, analysts said, leaving
the market vulnerable to a correction.
Spot gold <XAU=> was bid at $945.65 an ounce at 1316 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 $11.20 to $948.30.
"Selling started...when the future broke through $953, last
week's low," said Heraeus trader Alexander Zumpfe. "Stops (were)
triggered at $950."
Many gold traders buy and sell automatically when prices
reach a certain level, determined by past price moves.
Little direction came from the currency markets, with the
dollar flat versus the euro. Gold has a close inverse
relationship with the U.S. currency, and tends to become pricier
for holders of other currencies as the dollar appreciates.
[]
Gold priced in Australian dollars <XAUAUD=R>, meanwhile,
fell to its lowest level since late November 2008, at A$1,122.42
an ounce. Euro-priced gold <XAUEUR=R> fell 1 percent to 663.84
euros.
On other markets, European stocks extended losses in early
afternoon trade, while U.S. stock futures dipped on light profit
taking after a four-week rally. []
Investors are reluctant to add significant risk to
portfolios 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 economic recovery. Rising crude
prices can boost buying of bullion as an inflation hedge. []
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 $14.36 an
ounce against $14.59, tracking gold. Platinum <XPT=> was at
$1,240 an ounce against $1,261.50, while palladium <XPD=> was at
$270 an ounce from $273.
South Africa's biggest union said on Saturday it was
considering a wage offer from state power firm Eskom after talks
last week to avert a strike that could cripple 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 Sue Thomas)
