(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, May 8 (Reuters) - Gold ended sharply
higher on Thursday as the dollar retreated against the euro,
while platinum surged in advance of the launch of new U.S.
platinum trading products, dealers said.
Investment bank UBS <UBSN.VX> will soon launch two
exchange-traded notes offering long and short trading
strategies in platinum, underscoring strong investment demand
for the white metal.
Platinum jumped as much as 3 percent.
Meanwhile, gold <XAU=> rose as high as $879.85 an ounce and
was at $881.40/882.60 by New York's last quote at 2:15 p.m. EDT
(1815 GMT), against $870.85/872.05 late in New York on
Wednesday and last week's four-month low of $845.
"The metal's short-term direction is still coming from the
dollar. Given that oil prices are trading near record highs,
inflation concerns are still very much in the forefront of the
market," said Suki Cooper, metals analyst at Barclays Capital.
"We are likely to see range-bound trade in the near term,
with a bias on the upside. We need some catalyst, such as a
rapid weakening of the dollar or movements in equity markets,
to drive prices substantially higher," she said.
European Central Bank President Jean-Claude Trichet said
the bank must ensure inflation remains temporary, even as risks
to euro zone growth prevail. [].
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
U.S. crude futures <CLc1> hit a record high $124.61 a
barrel on Thursday.
Gold has lost about 15 percent in value since spiking to a
lifetime high of $1,030.80 on March 17, mainly driven by profit
taking and declines in other commodities.
"Crude oil is a pillar of support for precious metals. Amid
the low trading volumes, gold and silver prices have been
sticky, resisting major downward pressures so far this week,"
said Walter De Wet, analyst at Standard Bank.
Gold futures also rose, with the June contract <GCM8> on
the COMEX division of New York Mercantile Exchange settling up
$10.90, or 1.3 percent, at $882.10 an ounce. Prices ranged from
$866.40 to $887.
"It's hard to see a clear trend at the moment on gold.
Probably we are going to bounce around in the near term," said
Michael Widmer, metals analyst at Lehman Brothers.
PLATINUM RISES ON ETN NEWS
In other markets, spot platinum <XPT=> rose to a high of
$2,013.50 an ounce and was trading at $2,008.50/2,028.50,
compared with $1,949.50/1,969.50 late in New York on
Wednesday.
Dealers said the news that UBS would soon be launching two
U.S. platinum exchange-traded notes boosted buying sentiment.
The two ETNs -- UBS E-Tracs Long Platinum ETN <PTM.P> and
UBS E-Tracs Short Platinum ETN <PTD.P> -- will begin trading
soon on the NYSE Arca platform, according to CNBC television
and NYSE Euronext exchange data. []
In industry news, Lonmin Plc <LMI.L>, the world's third
biggest platinum producer, posted a 63 percent jump in
first-half profit on strong prices, but withdrew a long-term
output target due to South African power problems.
[]
The company, listed in London and with operations in South
Africa, had been aiming to boost output to 1.2 million ounces
by 2012 by opening new mines, but Chief Executive Brad Mills
said on Thursday this was now in doubt.
Silver <XAG=> rose 1.2 percent to $16.84/16.89 an ounce
from its late U.S. Wednesday quote of $16.60/16.66, while
palladium <XPD=> rose to $430.50/438.50 an ounce from
$420.50/428.50 late on Wednesday.
