(Recasts, adds comment/detail, changes dateline, pvs SINGAPORE)
By Pratima Desai
LONDON, June 6 (Reuters) - Gold rose on Friday, gathering
strength from higher oil prices and a stronger euro against the
dollar after the European Central Bank said euro zone rates
could rise in July.
Gold <XAU=> climbed to $886.80/887.80 a troy ounce from
$874.55/875.95 an ounce late in New York on Thursday, when it hit
$864.45 -- its lowest level since May 15.
ECB president Jean-Claude Trichet said on Thursday the bank
was on high alert over inflation and that the governing council
could raise rates as soon as its next policy meeting on July 3.
That boosted the euro against the dollar, which reversed
some of its recent gains. []
"I think its going to be a good day for gold with an upward
bias in line with other metals. Essentially it's hostage to the
dollar," said Nick Moore, analyst at ABN Amro.
A weaker dollar makes metals denominated in the U.S.
currency cheaper for holders of other currencies, while gold
used as a hedge inflation normally moves in the same direction
as crude oil. []
Traders said U.S. jobs data, a key gauge of U.S. economic
health, due later on Friday, could change the outlook for
currency and precious metals markets.
"Jobs data could be very important. People will be careful
about taking large positions before then," a traders said.
"If it hits the consensus then there won't be a problem, but
if its higher or lower then we could see a lot of volatility."
SWINGS
May non-farm payrolls due at 1230 GMT are expected to show a
fall of 58,000 compared with a drop of 20,000 in April.
Numbers better than the consensus will reinforce
expectations that the U.S. interest rates had bottomed, which
would give a boost to the dollar and oil, while hitting
sentiment in precious metals markets, analysts said.
"It's all about the dollar ... we've had these big swings in
the dollar and gold was looking very wobbly when the dollar
strengthened," said Stephen Briggs, analyst at Societe Generale.
Platinum <XPT=> rose to $2,055 an ounce, the highest since
May 29. It was last at $2,049/69 from $2,000.50/2,020.50 an
ounce on Thursday.
"Platinum is tracking gold, but underlying all that is the
power problem in South Africa," the trader said.
Platinum hit a record high of $2,290 an ounce on March 4 as
worries about supplies from South Africa mounted. South Africa
is the world's largest producer of the industrial metal used in
autocatalysts.
Johnson Matthey recently said platinum may spike to a record
high of $2,500 an ounce this year and that the market could end
in a substantial deficit this year.
Silver <XAG=> rose to $17.26/17.31 an ounce from
$17.12/17.18 an ounce on Thursday. Spot palladium <XPD=> rose to
$429.00/437 an ounce from $421.00/429.00 an ounce.
(Additional reporting by Chloe Fussell)
(Reporting by Pratima Desai; editing by Christopher Johnson)
