* Gold steady but off highs; consumers buy
* Inverse link with dollar revived
* Coming Up: Strike decision at Impala Platinum
(Updates comments, refreshes prices)
By Amanda Cooper
LONDON, Aug 5 (Reuters) - Gold rose towards $1,200 an ounce
in Europe on Thursday, set for a seventh daily gain, as fund
buying and consumer demand in Asia helped offset the impact of a
recovery in the dollar and a decline in ETF holdings.
Gold has rallied by 1.5 percent so far this week, its best
weekly performance since late June, as renewed concern about the
outlook for the U.S. economy, a resurgence in consumer buying
and the reestablisment of the inverse relationship to the dollar
have combined to support the market.
Spot gold <XAU=> was last bid at $1,196.35 an ounce at 1300
GMT in London, compared with $1,194.60 late in New York on
Wednesday, having hit two-week highs at $1,202.90 the day
before. December COMEX futures <GCZ0> were last at $1,198.80 an
ounce, showing a $3.20 gain on the day.
Data showing an unexpected rise in U.S. initial weekly
jobless claims undermined the dollar and pushed gold near
session highs at $1,199.55.
"What the consensus at the moment is yes, jobs are probably
recovering but not nearly strongly enough to bring unemployment
down in a meaningful fashion," said Citi analyst David Thurtell.
"We've said for months that $1,250 might be the top. We
haven't really seen anything to make us depart from that in the
last month or so. We can get back up there if, say, worries
emerge about the U.S. fiscal situation," he said.
Much of gold's safe haven appeal for investors that derived
from the euro zone debt crisis and pushed prices to record highs
in late June has evaporated.
But James Moore, an analyst with thebulliondesk.com said
renewed confidence in the global economy, helped by upbeat
corporate earnings, has lifted the broader commodity complex as
well as gold itself by association.
"While we have seen a bit of improvement in the European
debt situation, I think investors are still very cautious and
obviously, more and more people are looking to diversify their
portfolios. So, even if they only add a fraction of gold, those
numbers add up," Moore said.
DOLLAR LINK
As nervousness over the euro zone has abated, concern about
the robustness of some U.S. economic data has resurfaced,
knocking the dollar against the euro <EUR=> and resurrecting
gold's traditional inverse relationship to the U.S. currency.
On Thursday, the euro broke above $1.32 after European
Central Bank President Jean Claude Trichet said data suggested
stronger euro zone growth in the second quarter of 2010, while
U.S. stock futures slid after the rise in U.S. jobless claims.
[] []
There has been intense speculation in the fixed income
markets that the Federal Reserve will embark on a fresh
bond-buying programme to ensure interest rates remain at their
current low levels for some time, an environment that would be
beneficial to gold, which does not offer any yield.
"It's still a very tricky market to call on the near term. I
suppose the positive sign for gold now is that it has held up
some pretty heavy selling pressure towards $1,150," said Mark
Pervan, senior commodities analyst at ANZ in Melbourne.
The Bank of England also left interest rates unchanged.
An abatement in some of the consumer buying that had emerged
with gold's foray below $1,160 an ounce and ongoing redemptions
from exchange-traded products restricted gains in gold.
Holdings at the world's largest exchange-traded fund, SPDR
Gold Trust <GLD> fell for a seventh time to 1,281.834 tonnes.
Holdings hit a record of 1,320.436 tonnes on June 29. []
In other precious metals, silver <XAG=> was up about 0.7
percent on the day, holding at $18.38, compared with $18.25 in
New York on Wednesday, shrugging off a decline in silver
holdings in the iShares Silver Trust <SLV>.
In the platinum group metals, platinum <XPT=> pared earlier
losses to hold around $1,575.45 an ounce, versus $1,577.00.
Workers at South Africa's Impala Platinum <IMPJ.J> were voting
on possible strike action at the world's second largest platinum
producer. Palladium <XPD=> was at $496.00, versus $494.00.
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Alison Birrane)
