LONDON - Gold fell below $950 an ounce in Europe on Friday as the dollar rose against the euro after weak European economic data dented interest in the precious metal as a currency hedge. Most commodities priced in dollars have lost value as the U.S. currency firmed, as they become more expensive for holders of other currencies. Spot gold “The dollar is a little bit firmer...and oil has come off from the highs over $73,” said Mitsubishi analyst Tom Kendall. Gold has historically tracked oil prices, as it is often bought as a hedge against rising inflation. “(Gold) has been increasingly struggling over the last 6 or 7 days, since it touched $990 and failed to get to $1,000...the upside moves are getting fewer and fewer,” Kendall said. The dollar rose against a basket of major currencies, boosted by a slide in the euro after a plunge in euro zone industrial output reminded investors that the region’s economy continues to struggle. Crude futures eased below $72 a barrel, weighed by the firmer dollar but supported near an eight-month high. On the wider markets, European shares were flat as investors awaited a G8 finance ministers’ meeting later in the day, while U.S. stock futures pointed to a mixed open on Wall Street. Static Fresh demand for physical gold was lacklustre. Holdings of the SPDR Gold Trust, the world’s largest bullion exchange-traded fund, were static for a fourth session on Friday. Meanwhile gold buying in India, the world’s biggest bullion consumer last year, declined, with appetite for the precious metal receding as the wedding season tails off. Asset manager Fortis Investments told Reuters it favours gold as a longer-term play on both inflation and deflation. Gold is seen as an asset that holds its value in volatile times. But with physical demand lacklustre, gold is struggling to break out of its established range. “It is getting increasingly tough (for gold) to hold on to its gains beyond $965-966 levels,” said Pradeep Unni, senior analyst at Richcomm Global Services, in a note. Repeated failures to break and hold above this level has triggered a sell-off in the market which has resulted in a slide to the $943-$944 zone, he said. “Gold seems to have been sandwiched between these levels and as long as it trades in the same pattern, an immediate trend would be difficult to discern,” he added. Among other precious metals, silver tracked gold lower, falling to $15.04 an ounce against $15.37. Platinum was at $1,245.50 an ounce against $1,261, while palladium was at $251.50 against $254.00.

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