* Gold faces tough resistance ahead of $1,000/oz barrier
* SPDR gold ETF holds record, iShares silver sees outflows
(Releads, updates prices, adds comment)
By Jan Harvey
LONDON, June 3 (Reuters) - Gold slipped on Monday, paring
early gains, as the dollar recovered lost ground versus the
euro, denting interest in the metal as a hedge against weakness
in the U.S. currency.
Spot gold <XAU=> was bid at $976.50 an ounce at 1203 GMT,
against $980.85 an ounce late in New York on Tuesday. Earlier it
touched a high of $989.80.
Michael Blumenroth, a trader at Deutsche Bank, said the
firmer euro had prompted some profit taking.
"We don't see much physical demand or demand from exchange
traded funds," he said. "At the moment there is more speculative
money coming into the gold market, and that enters the market
pretty quickly and comes out of the market pretty quickly as
well."
"The key driver for the gold price at the moment is
euro-dollar," he added.
The dollar rebounded from its lowest level this year versus
the euro after sources told Reuters a downgrade in U.S.
sovereign credit ratings would not discourage Asian central
banks from buying U.S. Treasuries. []
Traders are eyeing a welter of data due out in the United
States later in the session -- including ADP jobs data, the ISM
May non-manufacturing index and the April factory orders report
-- for their impact on the currency markets.
Holdings of the SPDR Gold Trust exchange-traded fund were at
record levels on Tuesday, while ETF Securities said holdings of
its GBS ETF <GBSx.L> rose more than 7,000 ounces that day.
Gold demand in India, the world's biggest bullion consumer,
stayed weak on Wednesday as high prices dampened buying
interest. []
TOUGH RESISTANCE
Commerzbank trader Rory McVeigh said the precious metal was
likely to encounter heavy resistance on its way up to the key
$1,000 an ounce mark.
"The problem is that these are speculative longs, and as we
get towards $1,000 an ounce, you will get waves of selling as
people take money off the table," he said.
Silver <XAG=> was at $15.81 an ounce against $15.94. The
world's largest silver exchange-traded fund, the iShares Silver
Trust <SLV>, said its holdings dipped by 3.11 tonnes on Tuesday,
but remain near record levels. []
Spot platinum <XPT=> was bid at $1,240 an ounce against
$1,238.50 late in New York on Tuesday, while spot palladium
<XPD=> was at $246 against $246.50.
Both remained depressed by the lacklustre outlook for the
car industry, consumer of around half global supply of the
metals.
Data released on Tuesday showed U.S. auto sales fell nearly
34 percent in May from a year earlier, but aggressive
discounting helped steady results. []
"Although U.S. auto sales remain weak, data for May showed
some improvement from April, which we believe helped support
platinum group metals prices," said HSBC in a note.
"Even a mild upturn in auto demand may spur the PGMs to
rally further, as production cutbacks have reduced supply."
(Additional reporting by Pratima Desai; Editing by James
Jukwey)
