By Jan Harvey LONDON (Reuters) - Gold held above $1,060 an ounce in Europe on Tuesday as persistent weakness in the dollar fueled buying of the precious metals as an alternative asset. Platinum and palladium reached their highest in more than a year, buoyed by strength in gold prices and supply concerns. Spot gold was bid at $1,063.00 an ounce at 1249 GMT against $1,062.70 late in New York on Monday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $6.40 to $1,064.40 an ounce. "The gold market really comes down to where you think the dollar is going. We are still pretty bearish on the dollar, so that makes us favorable to gold," said Citigroup analyst David Thurtell. "People are worried about debt issuance by governments, inflation problems. It only takes a small allocation of fund portfolios to gold to really lift the market. The gold market is tiny compared to the bond and equity markets." The dollar is under pressure from rising risk appetite -- which benefits higher-yielding currencies -- expectations low U.S. interest rates will be sustained and questions about its status as the global reserve currency. The U.S. unit slid to fresh 14-month lows against the euro, with the single currency rising close to $1.50. World stocks .MIWD00000PUS hit a new 12-month high on Tuesday, fueled by optimism over corporate earnings and the global recovery after strong results from U.S. heavyweights Apple (AAPL.O) and Texas Instruments (TXN.N). Standard Bank analyst Walter de Wet said given the dearth of physical demand for bullion, gold was primarily driven by the dollar, which in turn was in thrall to sentiment on the equity markets as earnings season advances. "We are waiting for a whole bunch of earnings reports to come into the market, and if the past week's reports are anything to go by, these ones will also be positive," he said "If you see equities rising and U.S. Treasuries being sold, dollars will also be sold, which will make the dollar weaker." TECHNICAL SUPPORT Gold is technically well placed to build on the 6 percent rally it has posted in the last month, analysts who study charts of past price movements said. "Gold is now in its third week of trying to break through its $1,059/71 resistance area," Commerzbank said in a note. "Referring to the daily chart, we can see that the market remains bid though and that the above resistance area is now likely to be breached," they added. "The next minor upside target is seen at $1,079/1,082."

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