GOLD holds near $1,010

LONDON - Gold held near $1,010 (U.S.) an ounce in Europe on Friday as the U.S. dollar's recovery from one-year lows versus the euro took the steam out of its sharp run higher.

Prices are being supported by strong buying on dips, however, as investors continued to bet on a break of the metal's all-time high at $1,030.80 an ounce, set in March last year.

Spot gold to $1,012.10 an ounce at 0930 GMT against $1,011.45 late in New York on Thursday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange firmed $1.30 to $1,014.80 an ounce.

Among other precious metals, silver, platinum and palladium also edged lower after hitting multi-month highs on Thursday, tracking gains in gold.

The three metals - which, unlike gold, are largely industrial in use - are also benefiting from an improved outlook for the global economy, which is fuelling hopes rising industrial production will cause an uptick in demand.

Palladium, which is used as a component in catalytic converters, broke through $300 an ounce for the first time since September 2008 on Thursday, and is said by analysts to have among the best fundamentals of the all the precious metals.

"Palladium should profit from overall demand recovery forecasts... more than the other precious metals," Commerzbank analyst Eugen Weinberg told Reuters Television.

"If we consider palladium.... was trading at the beginning of the millennium above $1,000 an ounce, I think there is still plenty of room (for gains) going forward," he said. "I wouldn't rule out prices going to $400 next year."

Palladium was unchanged at $301.50, while platinum was at $1,327.50 an ounce against $1,335.50. Silver was at $17.12 an ounce against $17.18.

LONDON - Copper fell more than 3 per cent on Friday, weighed by rising inventories, slowing Chinese imports and broad-based losses across commodity markets linked to a rebounding U.S. dollar.

Copper for three-months delivery on the London Metal Exchange ended at $6,175 (U.S.) a tonne, down 3.3 per cent from a close of $6,385 on Thursday.

Among other industrial metals, aluminum eased to $1,917 a tonne from $1,967, after rallying to a four-week top of $1,978 on Thursday.

LME data showed aluminum stocks fell 6,400 tonnes but remained near a record 4.6 million tonnes.

Premiums in Asia and parts of Europe have, however, been rising on speculation Russia's RUSAL will sell Glencore another 500,000 tonnes of the metal.

"RUSAL selling to Glencore will hold metal off the market. I think the deal could see premiums rise again," Mr. Firman of VM Group said.

Lead traded at $2,193 a tonne against $2,276, having slid more than 5 per cent to $2,162 and compared with a one-week high of $2,350 hit in the previous session.

Mr. Hickson said concerns about Chinese smelter shutdowns were propping up lead, but every now and again the market fell on the view the smelter shutdowns would not happen.

Tin ended bid at $14,675 down from $14,800.

Mr. Firman said a crackdown on illegal mining in the main tin-producing islands in Indonesia may provide some support for the metal although the impact was offset by rising Chinese production and weak demand.

"Tin is still in limbo," he said.

Zinc ended at $1,912, down from $1,958.50 and nickel at $17,150 from $17,575.