* Gold lifted by jump in the euro versus the dollar
* Oil, other commodities bounce back as dollar retreats
* Indian import duty hike seen hitting gold imports
(Updates prices, adds further U.S. data reaction)
By Jan Harvey
LONDON, Feb 26 (Reuters) - Gold rose more than 1 percent to
$1,117.80 an ounce on Friday as the euro hit session highs
against the dollar, with traders attributing the move to a
report that a German bank will buy Greek bonds.
The metal briefly pared gains in earlier trade as the dollar
recovered some lost ground versus the single currency after U.S.
economic data, but quickly recovered as the euro bounced back.
Spot gold <XAU=> was bid at $1,115.00 an ounce at 1553 GMT,
against $1,104.70 late in New York on Thursday. U.S. gold
futures for April delivery <GCJ0> on the COMEX division of the
New York Mercantile Exchange rose $6.90 to $1,115.40 an ounce.
"Our view for this year is that the dollar is going to keep
weakening, and that would be supportive for gold," said Standard
Chartered analyst Daniel Smith.
"At the moment momentum is in the direction of dollar
strength, so we haven't convincingly broken out of that trend
yet, but the focus should be on what is going to happen in the
medium term, which will be further dollar weakness as the
economic recovery sets in."
The euro surged to session highs against the dollar on
Friday after a report said the German KFW Bank may buy Greek
bonds in an emergency measure. Weakness in the U.S. unit boosts
gold's appeal as an alternative asset. []
The U.S. unit earlier pared losses against the euro after a
government report showed the U.S. economy grew a touch faster
than first thought in the fourth quarter, and after data showing
sales of U.S. existing homes unexpectedly fell in January.
[] []
However, it was unable to build on this recovery and slipped
lower, allowing gold to rise back towards session highs.
Gold priced in euros <XAUEUR=R> also rose to 817.70 euros an
ounce against 815.61 an ounce late on Thursday, having earlier
hit a day high of 820.19 an ounce.
"It is clear... (for) gold in euro terms that the trend
remains rather clearly upward," said Dennis Gartman, editor of
trading note the Gartman Letter.
Other commodities also recovered, with oil prices rising
nearlt 2 percent after slipping as low as $77.05 a barrel on
Thursday. []
INDIA HIKES IMPORT DUTIES
Elsewhere, traders said India's move to raise customs duties
on precious metals will impact imports of the metals, which were
starting to recover after a sharp fall in 2009. []
Jewellery buying in India fell last year as high prices hit
demand, but the head of the Bombay Bullion Association estimated
on Thursday that the country's gold imports so far in February
were about four times the level of a year ago. []
Elsewhere the head of the financial institute of the
Development Research Centre, a Cabinet think-tank, said China
has to keep buying gold over a long period and any price fall
<XAU=> will present a good buying opportunity. []
Silver <XAG=> was at $16.31 an ounce versus $16.04, tracking
gains in gold. Platinum <XPT=> was at $1,533.50 an ounce against
$1,529, and palladium <XPD=> at $425.50 versus $420.
In a weekly report, Barclays Capital said the New York-based
platinum and palladium exchange-traded funds launched earlier
this year by the U.S. arm of London's ETF Securities could have
a significant impact on the two metals' market balance.
"These ETFs are physically backed and therefore reduce
available stocks and consume fresh supply," it said.
"If the products follow a similar growth trend to the
equivalent gold and silver products when they were first
launched in the United States, then ETP flows are set to become
an expanding feature of the market balance."
(Editing by James Jukwey)
