* Concerns about rising prices support gold
* U.S. housing data eyed for clues on sector's stability
* Holdings of SPDR gold ETF <XAUEXT-NYS-TT> unchanged
(Recasts, pvs TOKYO)
By Rebekah Curtis
LONDON - Gold held near a seven-week high on Monday as
inflation fears boosted bullion's appeal as a hedge, but it came
under pressure on the back of a rising dollar.
Gold <XAU=> was 0.1 percent lower at $929.55 per ounce at
0935 GMT, compared with $930.70 late in New York in the previous
session.
On Friday, bullion climbed to $933.65, its highest level in
seven weeks after data showed U.S. core inflation in April rose
more than expected.
Analysts said bullion was still an attractive hedge against
risk as the market remains unsure whether or not the worst has
passed for the global economy.
"The outlook for gold is a lot better than the outlook for
the U.S. economy," said Charles Kernot, mining analyst at
Evolution Securities. "There is still a lot of uncertainty in
terms of the outlook for the global economy...People are now
looking at it being a much slower recovery (than expected)."
Investors looking for further clues on the health of the
world's biggest economy will keep an eye on the U.S. National
Association of Home Builders' May housing market index, due at
1700 GMT.
Nevertheless, U.S. economic data on Friday offered some
evidence that the recession's worst phase could be over, with
April consumer price unchanged and industrial output declining
at a slower pace than in March. []
A rise in the dollar pressured bullion. Gold often moves in
the opposite direction to the dollar. A fall in the dollar makes
it less expensive for holders of other currencies to buy the
metal. []
Recent weakness in the U.S. currency had maintained support
for bullion.
Kernot added that precious metals will be at the forefront
of investors' minds as Monday marks the start of London's annual
platinum week gathering.
PLATINUM EYED
Platinum rose 0.2 percent to bid at $1,103 <XPT=> an ounce
from $1,100.50 from Friday as traders anticipated the release of
Johnson Matthey's 2009 platinum report, which will include price
outlooks and forecasts for demand and supply for platinum group
metals.
Platinum group metals have seen major losses in the past
year as the metals with industrial end-uses have been hammered
by devastation in the autos industry.
Palladium <XPD=> was at $222.00 from Friday's $222.50, while
silver <XAG=> bid at $13.94 an ounce from $13.93.
"For both platinum and palladium, the rapid ramp-up in ETF
holdings have slowed significantly. As with gold, we believe the
slowdown is due to the rally in equity prices since the middle of
March," Walter de Wet, a strategist at Standard Bank said in a
note.
Investors were hesitant to pile more money into gold,
keeping holdings at the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust <GLD>, unchanged at
1,105.62 tonnes as of May 15. []
(Editing by Editing by Keiron Henderson)
