Battered gold recovers a little ground, but still seen as volatile

Gold recovered from 11-month lows on Thursday as the dollar slipped from highs....

Gold recovered from 11-month lows on Thursday as the dollar slipped from highs in response to U.S. trade data, and as firm physical demand for the precious metal underpinned prices.The stronger dollar was the key factor driving gold to fresh 11-month lows, platinum to its weakest level since January 2007 and silver and palladium to multi-year lows earlier, as its recovery dented precious metals’ appeal as an alternative investment.Spot gold traded at $745.70/746.90 an ounce at 1319 GMT from $752.55/754.15 in New York on Wednesday, having earlier fallen to a session low of $738.50.The precious metal slipped nearly 2 percent as the dollar reached a one-year high against the euro. However, the dollar’s retreat after data showed the U.S. trade deficit widened in July allowed gold to pull back some ground.With the effect of the strengthening dollar balancing resurgent demand for coins, bars and jewellery, the outlook for gold remains volatile, analysts said."From a fundamental point of view I would expect (gold) prices to be stronger over the coming months due to high demand, but from a technical point of view there are reasons to believe they may go even lower," Commerzbank analyst Eugen Weinberg said.Among other precious metals, platinum and palladium also recovered after dipping dramatically in earlier trade. Platinum slipped more than 4 percent and palladium 5 percent as fears over the outlook for automotive sector demand sparked selling.Spot platinum fell to a session low of $1,126 an ounce, its weakest level since Jan 2007, before recovering to trade at $1,154.00/1,174.00 an ounce at against $1,176.00/1,196.00 late in New York on Wednesday.Spot palladium also slipped to a fresh three-year low of $212.50 an ounce, before recovering to trade at $227.00/233.00 against $224.00/232.00.The automotive sector has been suffering the effects of the recent global economic slowdown. Ford Canada said on Wednesday it is cutting another 500 jobs in Ontario as U.S. sales continue to deteriorate.