* Dollar strengthens to one-month high versus the euro
* European shares, U.S. stock futures up after GE, Citi
* SPDR gold ETF sees biggest outflow since late October
(Updates prices)
By Jan Harvey
LONDON, April 17 (Reuters) - Gold fell on Friday, extending
the previous session's near 2 percent losses, as the dollar rose
to a one-month high against the euro and stock markets firmed,
denting the metal's appeal as an alternative investment.
Analysts fear the largest decline in holdings of the world's
main gold-backed exchange-traded fund in nearly six months on
Thursday shows investors' interest in the metal is waning.
Spot gold <XAU=> was bid at $868.75 an ounce at 1249 GMT
against $874.55 late in New York on Thursday. U.S. gold futures
for April delivery <GCJ9> on the COMEX division of the New York
Mercantile Exchange fell $6.70 to $872.60 an ounce.
Gold's slide "is linked to equities, and also the
re-emergence of positive risk appetite by investors", according
to Societe Generale analyst David Wilson.
Given this, the fall in holdings of the SPDR Gold Trust ETF
<GLD> by the most since Oct. 23 is unsurprising, he said.
"A lot of the flow into the gold funds has been taking the
view of gold as a safe haven," he said.
"But as other asset classes begin to become attractive, it
makes perfect sense that you are seeing money being withdrawn
from the gold funds to be put into other assets."
The trust's holdings fell 8.25 tonnes from their previous
record level on Thursday to 1,119.43 tonnes. []
Equities strengthened further on Friday, adding to pressure
on gold. European shares and U.S. stock futures rose after
better-than-expected results from General Electric <GE.N> and
Citigroup <C.N>. []
On the currency markets, the dollar strengthened to a
one-month high versus the euro, with fears over euro zone
economies flaring after Moody's said Ireland's AAA rating may be
cut. []
A stronger dollar typically weighs on gold, which is often
bought as an alternative investment to the currency.
On the demand side, gold buying in India, the world's
largest bullion buyer, has ticked up in recent days as prices
fell, and ahead of the Hindu festival Akshaya Tritya on April
27.
A dealer at a private bank in Mumbai said all banks were now
importing gold for customers. Demand for the metal in India fell
sharply last year as prices rose.
REVIVE
India's gold imports in the first 15 days of April were 10
tonnes as falling prices revived demand after very few imports
in the previous two months, the head of Bombay Bullion
Association (BBA) said on Thursday. []
Among other precious metals, spot platinum <XPT=> was bid at
$1,205.50 an ounce against $1,201.50, while spot palladium
<XPD=> was bid at $231 an ounce, flat from the previous day.
Swiss bank UBS raised its 2009 price view for platinum to
$1,100 an ounce from $1,050 previously, and its 2010 forecast
for the precious metal to $1,175 an ounce from $1,100.
"Although we are decidedly unimpressed with current
industrial demand for platinum..., much greater-than-expected
Chinese platinum buying has caused us to lift our forecasts
somewhat," the bank said in a note.
Hopes that the economic downturn may have reached its nadir
have benefited prices of the industrial precious metals, with
both platinum and palladium posting gains in the first quarter.
Rhodium <RHOD-LON> climbed 22 percent this week as hopes the
downturn in the automotive sector is bottoming out lifted
interest in all the platinum group metals, which are a key
component in autocatalyst manufacture. []
Ruthenium <RUTH-LON> also ticked higher, rising 7 percent to
$75 an ounce from $70.
Silver <XAG=> was bid at $11.94 an ounce against $12.21.
(Editing by Sue Thomas)
