L rose 2 percent in the week to January 2 to1

gold futures for February delivery GCG9 on the COMEXdivision of the New York Mercantile Exchange were down $10.10 at$847.70. VM Group analyst Matthew Turner said investors were lookingto the currency markets for direction. "A lot of news onphysical demand has been quite poor, and that might also beweighing on prices," he added The U.S. currency rose against the euro after a flashestimate of euro zone inflation data came in weaker thanexpected, increasing pressure on the European Central Bank tocut interest rates. ID:nL6532861 A firm dollar reduces gold's appeal as an alternativeinvestment However, the U.S. currency trimmed gains versus theeuro after data showed U.S factory orders and pending home salesdropped by more than expected in November.

ETF Securities, which operates Europe's largest gold-backedETF, said holdings of its Physical Gold exchange-tradedcommodity (PHAU.L) rose 2 percent in the week to January 2 to1.899 million ounces. ID:nL6502191 Holdings of the world's largest bullion ETF, the SPDR GoldTrust (GLD), held at a record 780.23 tonnes on Monday. Firmer oil prices, which are holding just below $50 a barrelas supply fears were fuelled by Israel's incursion into Gaza anda dispute between Russia and Ukraine over natural gas, also lentsome support to gold. ID:nSIN367919 Among other precious metals, platinum and palladium ralliedto multi-week highs, shrugging off a spate of poor vehicle salesnews from carmakers, the major consumers of the metals.

Spot palladium XPD was the main riser, climbing 8 percentto a six-week high of $198.50. The metal was later quoted at$194.50/199.50, against $183.50 late in New York on Monday. Platinum also climbed more than 2 percent to $967.50, itshighest level for three months It was later at $958.50/963.50an ounce against $946. "With the commodities basket, people are shifting out ofgold and into other commodities that have been underperforminglately," said Commerzbank trader Rory McVeigh.