* ECB signals more policy easing, weakening euro
* Stocks climb, oil rebounds strongly
* China, India physical gold demand slow
(Adds comment, updates prices)
By Chris Prentice and Jan Harvey
NEW YORK/LONDON, Jan 22 (Reuters) - Gold fell on Friday as
hints of more monetary stimulus from the European Central Bank
weighed on the euro and pushed stocks higher, denting appetite
for alternative assets.
Benchmark Brent crude futures LCOc1 , which had fueled risk
aversion with a tumble to 12-year lows, closed out a volatile
week by soaring 9 percent on Friday as traders cashed in on
record short positions. O/R
That fed into stronger appetite for assets viewed as higher
risk, such as equities and industrial commodities, and weighed
on gold.
Spot gold XAU= was down 0.6 percent at $1,095.16 an ounce
at 2 p.m. EST (1900 GMT), while U.S. gold futures GCv1 for
February delivery closed down $1.90, or 0.2 percent, at
$1,096.30. The metal rose to a two-month high of $1,112 last
week as equities .SPX .MIWD00000PUS and oil slid.
"The flight to quality has been set aside," said Phillip
Streible, senior commodities broker for RJO Futures in Chicago.
ECB President Mario Draghi said on Thursday that fading
growth and inflation prospects will force the bank to review its
policy stance in March, a strong signal that more easing could
be coming within months.
His comments lifted the dollar 0.6 percent against the euro
EUR= and prompted a rally in beleaguered stock markets.
MKTS/GLOB
"$1,100 to $1,115 is a tough level to overcome," said
Commerzbank (DE:CBKG) analyst Carsten Fritsch. "Today there is a rebound
in stock markets that certainly contributed to this drop, but I
wouldn't rule out another push above that level if stock markets
start to tumble again."
Even with the day's loss, gold was poised to end the week
higher. Bullion has benefited from the risk aversion that hurt
stocks and crude oil this month, though slow physical demand
from major consumers China and India kept a lid on price gains.
Gold premiums in China rose only slightly this week and
sellers in India offered discounts given poor demand. GOL/AS
Holdings of the world's largest gold-backed exchange-traded
fund, New York-listed SPDR Gold Shares GLD , rose a further 1.8
tonnes on Thursday, data from the fund showed. That brought its
inflow for the week to 4.2 tonnes.
Among other precious metals, platinum and palladium, which
are widely used in auto catalysts, benefited from firmer
appetite for industrial commodities.
Platinum XPT= was up 1.5 percent at $829.16 an ounce,
rebounding from the previous session's seven-year low of
$806.31. Palladium XPD= gained 0.2 percent to $498.25.
Silver XAG= eased 0.3 percent to $14.02 an ounce.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-2016 asset returns http://reut.rs/1WAiOSC
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>