* Dollar index rises as China hikes reserve requirements
* Euro remains depressed as Greece bailout details awaited
* Oil, metals tumble after China news
* For a related ANALYSIS, please see: []
(Updates prices)
By Jan Harvey
LONDON, Feb 12 (Reuters) - Gold was down 1 percent in Europe
on Friday as the dollar hit a seven-month high versus a basket
of currencies after China unveiled a surprise hike in commercial
banks' reserve requirements.
The euro slipped to a nine-month low against the dollar
after a European Union summit the previous day failed to quell
investors' concerns on Greece, and as China's surprise monetary
tightening hit assets seen as higher risk.
Spot gold <XAU=> was bid at $1,085.60 an ounce at 1529 GMT
versus $1,095.85 late in New York on Thursday. In that session
it hit a one-week high of $1,097.75 an ounce as investors bought
the metal amid fears over the stability of paper currencies.
Michael Widmer, an analyst at Bank of America-Merrill Lynch,
said gold was coming under pressure as the dollar appreciated
broadly on the back of the China news. []
"We always see that when the markets sell off on the back of
a macro event, gold sells off along with those," he added.
"Metals are lower, equities are lower as well and gold is
falling along with those."
U.S. gold futures for April delivery <GCJ0> on the COMEX
division of the New York Mercantile Exchange fell to $1,087.00
an ounce.
The dollar <.DXY> hit its highest since late July against a
basket of currencies on Friday after China surprised markets by
raising commercial banks' reserve requirements. []
Strength in the U.S. unit curbs gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Other commodities also declined, with oil tumbling nearly 3
percent to below $74 a barrel and base metals copper and zinc
sliding nearly 3 percent at their lows. [] []
European shares extended losses and U.S. stocks dropped
about 1 percent in early trade after China's central bank raised
reserve requirements. [] []
EURO-PRICED GOLD
Gold priced in euros <XAUEUR=R> performed particularly well
on Thursday, rising 2.8 percent to a peak of 802.73 euros an
ounce, within 10 euros of the record high it hit in December.
The metal eased on Friday to 796.87 euros an ounce from
799.49 late in the last session, but from a technical viewpoint
it is well positioned to make fresh gains, analysts said.
"Since early December, gold denominated in euros has been
locked in a well-defined contracting range," said technical
analysts at Barclays Capital. "Now that range is on the verge of
giving way for a resumption of the larger bull trend.
"A break of 802 would confirm (this), pointing to a re-test
of the 813 December high. However, this should prove to be only
a temporary stopping point as the measured move... targets the
856 area before greater signs of topping emerge."
Elsewhere demand for gold-backed exchange-traded funds
remained lacklustre, with holdings of the world's largest gold
ETF, New York's SPDR Gold Trust <GLD>, steady on Thursday, the
trust said on its website. []
On the supply side, the head of the Russian Gold
Industrialists' Union lobby group said Russia may lift gold
output to 207 tonnes this year from 205 tonnes in 2009, with
mine output rising 5 tonnes to 183 tonnes. []
Among other precious metals, silver <XAG=> was at $15.38 an
ounce against $15.64. Platinum <XPT=> was at $1,501.50 an ounce
against $1,528 and palladium <XPD=> at $412.50 against $419.50.
(Editing by Anthony Barker)
