Gold steady as risk aversion offsets dollar strength

By Melanie Burton

MELBOURNE (Reuters) - Gold was little changed on Tuesday as lingering caution in the aftermath of the Paris attacks offset the downward impact of a firmer U.S. dollar and weaker demand in major gold buyers.

Expectations are growing that the United States will hike interest rates next month, which has pushed the dollar to its highest in half a year against a basket of currencies, making precious metals more expensive for holders of other currencies.

"It seems all over the world, the economy is weak, also within China and India, so the potential market for consumers has also declined," said Dick Poon, general manager of Heraeus Precious Metals.

China and India are the world's top two consumers of gold.

Spot gold edged down 90 cents or or 0.1 percent to $1,081.40 an ounce by 0415 GMT. It struck $1,074.26 a tonne on Nov. 12 which was its cheapest in more than five years.

U.S. gold slipped by 0.3 percent to $1,080.90.

French President Francois Hollande called on the United States and Russia on Monday to join a global coalition to destroy Islamic State following the attacks across Paris, and announced a wave of measures to combat terrorism in France.

Asian stocks rose across the board on Tuesday, relieved after seeing Wall Street take the Paris attacks in stride and surging overnight, while expectations for a December rate hike by the Federal Reserve kept the dollar on a bullish footing.

The leaders of the world's largest economies stuck to a goal of lifting their collective output by an extra 2 percent by 2018, even though growth remains uneven and weaker than expected globally, they said in a statement on Monday.

Euro zone inflation was revised up to 0.1 percent in October, the EU's statistics agency said on Monday, pushed into positive territory by price increases for fruit and vegetables.

(Reporting by Melanie Burton; Editing by Richard Pullin)