LONDON (Reuters) - Gold prices fell toward $1,100 an ounce in Europe on Thursday as the dollar's rise to a near six-month high versus the euro curbed buying of the precious metal as an alternative asset. Spot gold was bid at $1,104.05 an ounce at 1322 GMT, against $1,111.10 late in New York on Wednesday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $8.20 to $1,104.40. The dollar hit a near six-month high versus the euro on Thursday as investors, spooked by concerns over Greece's rising debt, sold the single currency. Strength in the dollar versus the euro reduces gold's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. Daniel Major, an analyst at RBS Global Banking & Markets, said the dollar had broken through key technical levels and was expected to firm further. "Gold could see more downside from that," he said. "There have been some reasonably positive signs from the jewelry market, but from the investment side, in the last two or three weeks we have seen modest but persistent redemptions from the exchange-traded funds," he added. "In terms of the net speculative long position on COMEX, the market still remains reasonably long," he added. "That leaves potential for some liquidation." Holdings of the world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, were steady on Wednesday, but are down 21.7 tonnes or 1.9 percent this year. In the same period of 2009, they rose 22.7 tonnes. Holdings of the main silver ETF, the iShares Silver Trust, have also fallen 154 tonnes in 2010 to date. Traders say some investors with an interest in precious metals ETFs are pulling money out of the SPDR and the iShares fund in favor of new U.S. platinum- and palladium-backed ETFs. OIL STEADY In India, historically the world's largest consumer of gold, traders continued to buy as prices hit new two-week lows. "Yesterday's sales were highest in the month," said a dealer with a state-run bank. On the wider markets, oil prices were steady, supported by strong Chinese growth data. European stocks rose around midday on Thursday after hitting a 2-1/2 week low earlier, while U.S. stock futures climbed after Goldman Sachs' fourth-quarter results. Among other precious metals, spot platinum was at $1,601.50 an ounce versus $1,622.50, while palladium was at $459.50 versus $465. Lease rates for the two metals have risen steadily since the launch of the ETFs operated by a U.S. unit of London's ETF Securities, dealers said. Silver was at $17.63 an ounce against $17.87, following gold lower. "Since silver tends to disproportionally track the movements of gold, and since we expect the gold price to correct in the spring, silver is likely to weaken temporarily as well," Commerzbank said in a note. "Prices could fall to as low as $15.00 an ounce."

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