Gold eases as dollar recovers, oil slips

By Jan Harvey

LONDON (Reuters) - Gold slipped on Monday alongside oil prices as the dollar firmed to a one-week high after jobs data last week showed the U.S. economy may not be as weak as previously thought.

A recovery in the equity markets is also denting gold's appeal as an alternative investment to shares, analysts said.

Gold fell to $915.90/916.90 an ounce at 1527 GMT (11:27 a.m. EDT) from $932.00/933.00 an ounce in London on Friday, when U.S. markets were closed for Independence Day holiday.

Earlier it touched a session low of $914.50 an ounce, nearly 2 percent below the level it traded at on Friday.

"The euro is a bit weaker, the dollar is stronger and oil is slipping a bit," said Commerzbank analyst Eugen Weinberg.

"There has been a strong negative correlation between the gold price and the equity markets. Risk aversion has led to an inflow into gold, so higher equity markets could see a lower gold price."

The dollar is drawing support from last week's jobs report, which was less bleak than had been expected, and a slide in oil prices.

A firmer dollar typically pressures gold, which is bought as an alternative investment to the U.S. currency. A stronger greenback also makes dollar-priced commodities such as precious metals more expensive for holders of other currencies.