* 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)
By Jan Harvey
LONDON, March 11 (Reuters) - Gold prices were little changed
in Europe on Thursday, paring earlier losses as the dollar
surrendered gains 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=> was bid at $1,107.30 an ounce at 1555 GMT,
against $1,107.85 late in New York on Wednesday. Earlier it fell
as low as $1,100.04 an ounce.
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange eased $1.40 to
$1,106.70.
Prices were pressured in earlier trade as the euro <EUR=>
softened against the dollar. Strength in the U.S. unit cuts
gold's appeal as an alternative asset and makes dollar priced
commodities more expensive for other currency holders. []
Gold later steadied as the euro recovered, but prices remain
under pressure from gains in the dollar, which has firmed 4.5
percent against the single currency so far this year.
"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.
BUYING EMERGES AT LOWER PRICES
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."
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 was steady near $82 but off 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 worries 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 its session lows.
The metal was later at $453.50 against $461.50. It has now
surrendered nearly 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 $1,588 an ounce against $1,592, also
retreating from the last session's seven-week highs. Silver
<XAG=> was bid at $16.99 an ounce against $16.97, well off the
seven-week high of $17.62 it hit on Wednesday.
(Editing by Sue Thomas)
