* Dollar recovers after wilting on Bernanke comments
* HSBC lifts 2009, 2010 gold price forecasts
* Chinese November car sales almost double
(Updates prices, adds comment)
By Jan Harvey
LONDON, Dec 8 (Reuters) - Gold prices fell slightly in
Europe on Tuesday as the dollar recovered the earlier losses it
made after comments from Federal Reserve Chairman Ben Bernanke
on the U.S. economic outlook curbed the dollar's recovery.
The metal remains supported above $1,150 an ounce, however,
as investors are attracted back into gold after prices posted a
three-session decline, analysts said.
Spot gold <XAU=> was bid at $1,152.75 an ounce at 1204 GMT,
against $1,156.90 late in New York on Monday. In that session it
fell to a two-week low of $1,135.80, having touched a record
$1,226.10 on Dec. 3.
Commerzbank analyst Eugen Weinberg said lower prices were
attracting investors back to gold. "We have seen this buying on
dips in the last few weeks, which is a sign of strength," he
said. "Stronger hands are taking the place of weaker hands."
However, the metal remains vulnerable to a turnaround in the
dollar, he added.
"Should the dollar strengthen in the coming days, it would
be very difficult for gold prices to hold at current levels,
because it would take one of the most important arguments (for
buying gold) away from the market," he said.
The dollar recovered on Tuesday after declining in earlier
trade after comments from Bernanke cooled speculation of an
early rise in U.S. interest rates. []
Strength in the U.S. unit boosts gold's appeal as an
alternative asset and makes dollar-priced commodities more
expensive for holders of other currencies.
Bernanke said the U.S. economy still faced headwinds and
unemployment could stay high for some time, playing down the
impact of Friday's better-than-expected payrolls report, which
boosted the dollar and sent gold sharply lower. []
U.S. gold futures for February delivery <GCG0> on the COMEX
division of the New York Mercantile Exchange fell $9.10 to
$1,154.90 an ounce.
HSBC raised its gold price forecasts for 2009 to $990 an
ounce from $925 previously, and said it sees prices at $1,150 an
ounce next year, against $950 previously.
"Ongoing accomodative U.S. monetary and fiscal policies may
lend further support to gold," the bank said in a note.
BUYING SPECULATION
Gold prices rallied sharply in November amid speculation
that more central banks -- especially that of China -- may try
to boost their gold reserves, after the Reserve Bank of India
bought 200 tonnes of bullion from the IMF.
An official Chinese newspaper said on Tuesday China should
increase the proportion of gold in its foreign exchange reserves
to ensure the safety of its overall portfolio. []
Expectations for further central bank diversification into
gold is supporting investment in the metal, analysts said, and
the recent price dip may encourage this.
"Now the real test comes for the sustainability of
investment demand for the precious metal, though we believe that
sentiment remains bullish in the long run," said VTB Capital
analyst Andrey Kryuchenkov in a note.
"It is a very healthy correction, cementing a good base for
further growth in 2010, while some investors will use it as a
good opportunity to buy on the dips."
Among other precious metals, silver <XAG=> was bid at $18.05
an ounce against $18.16, platinum <XPT=> at $1,446 an ounce
against $1,438.50 and palladium <XPD=> at $372 against $371.
Traders in autocatalyst materials platinum and palladium are
looking for fresh signs of recovery in the beleaguered
automotive market for clues as to the future strength of demand.
Official data on Tuesday showed China's passenger cars sales
in November rose 98 percent from a year earlier. []
(Editing by James Jukwey)
