LONDON (Commodity Online) : Gold eased in early European trade Thursday and fell below $990 an ounce mainly after the dollar index turned higher.

Spot gold was seen trading at $988.30 an ounce at 3.30 p.m Indian time as against $991.15 late in New York on Wednesday.



U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange fell $6.80 to $990.40 an ounce.

The dollar index edged higher on Thursday, recovering after approaching its lowest point this year. Firmer stock markets and rising oil prices have boosted interest in currencies seen as higher risk in recent sessions.

A weak U.S. currency boosts interest in gold as an alternative asset, and also makes the dollar-priced precious metal cheaper for non-U.S. investors.

Among other precious metals, silver was flat at $16.27, platinum was at $1,273.50 against $1,276, while palladium was at $289 against $290.50.

Crude oil prices climbed back above $72 a barrel on Thursday, further supporting gold, which is often bought as a hedge against oil-led inflation.

Oil is benefiting from a rise in stock markets, dollar weakness, and soothing words from the OPEC producer group. On the wider markets, world stocks and European equities rallied to 11-month highs, building on recent gains.

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