"We still like the bullish gold view. There is no interest
rate support for the dollar, so the dollar will fall. Real rates
will remain low. Equity markets, even when they go up, are still
a bit skittish."
The euro <EUR=> dipped on Monday as short-term players were
squeezed out of long positions after the single currency touched
a three-week high against the dollar, buoyed by Friday's
stronger than expected payrolls data. [FRX/]
European equities extended the previous session's gains on
optimism after last week's U.S. jobs data, with world stocks
climbing on hopes that a slip back into recession could be
avoided. [MKTS/GLOB] [.EU]
Meanwhile gold demand in India was solid, dealers reported,
after the rupee rose to a two-week high, making dollar-quoted
assets cheaper for local buyers. [ID:nSGE68508H]
"Gold is sitting in a very tight range," said VTB Capital
analyst Andrey Kryuchenkov. "The downside will be limited
because of seasonality, with Asian buyers really looking to buy
on any dips."
India, the world's biggest consumer of the yellow metal, has
recently entered the traditionally strong festival period for
bullion consumption, which began with Raksha Bandhan in late
August and lasts through November with Dhanteras.
PALLADIUM SHINES
Among other commodities, oil slipped towards $74 per barrel
as the end of the U.S. driving season and high levels of
unemployment in the world's biggest oil consumer raised concerns
over the outlook for demand. [O/R]
But gains in base metals helped underpin industrial precious
metals such as platinum and palladium, which are widely used in
the automotive industry. Palladium posted its strongest weekly
rise since late July last week, with gains of 5.7 percent.
On Monday, platinum <XPT=> was at $1,557.25 an ounce against
$1,553.40 and palladium <XPD=> at $527 against $526.68.
Palladium's gains last week helped push the ratio of
platinum to palladium -- the number of ounces of palladium
needed to buy an ounce of platinum -- to a low of 2.94 on
Friday, its lowest level since the second quarter of 2004.
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For a graphic showing the ratio of platinum to palladium,
click on: http://r.reuters.com/nah69n
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Both metals benefited from data last week that showed a
hefty rise in Chinese car sales in August. Chinese cars
predominantly use petrol engines, which have a higher loading of
palladium than platinum.
Meanwhile, silver <XAG=> was little changed at $19.89 an
ounce ounces versus $19.87. Friday's Commitment of Traders
report on New York precious metals positioning showed a rise in
net long positions in silver.
"Unsurprisingly silver's recent price rally is closely tied
to Comex positioning," said UBS analyst Edel Tully in a note.
"We continue to like silver; seeing it playing a role as poor
man's gold but also benefiting when risk-on appetite returns."
(Reporting by Jan Harvey; editing by Jane Baird)