* Dollar resumes upward trend after U.S. trade data
* 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 fell towards $1,100 an
ounce in Europe on Thursday as the dollar rose against the euro
in volatile trade after data showed the U.S. trade deficit
narrowed in January.
Palladium slid nearly 3.5 percent, meanwhile, 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=> fell as low as $1,100.04 an ounce and was
bid at $1,104.55 an ounce at 1425 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 fell $3.40 cents to
$1,104.70.
Prices were lifted as the euro <EUR=> softened against the
dollar. 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. []
Persistent fears over sovereign debt issues in peripheral
euro zone economies like Greece and Spain are keeping the euro
under pressure, but are also lifting safe-haven flows into gold.
"As long as we don't find any clarity with respect to Greece
and neighbouring nations, gold will continue to fight bearish
pressure," said Richcomm Global Services analyst Pradeep Unni.
Prices have so far 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," said
Unni. "We hear there are a lot of buy orders below $1,100."
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 more than 3.5 percent to $448 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 $1,581.50 an ounce against $1,592,
also retreating from the previous session's seven-week highs.
Silver <XAG=> was bid at $16.95 an ounce against $16.97, well
off the seven-week high of $17.62 it hit on Wednesday.
(Editing by Keiron Henderson)
