* Gold supported as dollar turns markedly lower vs euro
* Rising interest rates could put damper on gold's rise
* GFMS sees silver hitting $18 an ounce this year
(Recasts, updates with quotes, closing prices, changes dateline,
pvs LONDON)
By Frank Tang
NEW YORK, June 11 (Reuters) - Gold futures climbed on Thursday
as the dollar turned broadly lower, and signs of long-term currency
weakness could spur fresh buying of bullion as a hedge against the
depreciating greenback.
Gold rose toward $1,000 an ounce last week as a steadily
weakening dollar, combined with better economic sentiment, boosted
investment demand. However, a subsequent dollar rally triggered by a
bright U.S. jobs report last Friday sent bullion lower.
"The dollar's trend has not been very certain in the last couple
of days, and that was holding gold back," said Tom Pawlicki,
precious metals and energy analyst at MF Global.
"With the dollar moving to a new four-day low, there is more
certainty now for gold on the upside," he said. Pawlicki also noted
that prices bounced each time it fell toward key chart support at
$944.50 an ounce, indicating gold's next move should be higher.
U.S. August futures <GCQ9> settled up $7.30 at $962 an ounce on
the COMEX division of the New York Mercantile Exchange.
Spot gold <XAU=> was at $956.55 at 2:38 p.m. EDT (1838 GMT),
against $953.65 an ounce late in New York on Wednesday.
Earlier in the session, the market briefly fell toward $940 an
ounce, responding to fleeting dollar strength after
stronger-than-forecast U.S. retail sales numbers.
The U.S. currency later fell, making gold cheaper for non-U.S.
investors, as markets concentrated on concerns about a rising U.S.
budget deficit. []
Simmering geopolitical tensions in the Middle East and the
Korean peninsular, inflation worries brought by $73 per barrel oil,
and a first influenza pandemic in 40 years provided background
support to gold as a safe haven, traders said.
Traders, however, closely watched the treasuries market, as
benchmark 10-year U.S. Treasury yields had risen to their highest
levels in eight months on Wednesday amid concerns about the
increasing U.S. budget deficit.
Rising Treasury yields and high interest rates are negative for
gold and other investments which are perceived as riskier, because
of the higher opportunity costs of owning them.
SOFT PHYSICAL DEMAND
Gold buying in the world's largest bullion consumer, India,
remained slow on Thursday, with dealers unwilling to make fresh
purchases as the wedding season nears its end. []
"Lack of physical demand has been one of the main problems for
gold at these prices," said VM Group analyst Matthew Turner.
On the supply side, mine output from South Africa fell 13
percent in volume terms in April from a year before, official data
showed. []
Silver <XAG=> was at $15.37 an ounce, up from $15.15 late in New
York on Wednesday, while platinum <XPT=> was at $1,264 an ounce
against $1,261, and palladium <XPD=> was at $254.50 an ounce,
against $253.
Consultant GFMS said silver prices could rise as high as $18 per
ounce later this year as investment demand for the precious metal
takes up the slack from falling industrial usage [].
Meanwhile, strong investment buying of platinum continued, with
ETF Securities reporting another small inflow of just over 3,000
ounces on Wednesday. Holdings of the company's ETFS Physical
Platinum fund have risen 42,700 ounces or 14 percent in the last
week.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 962.00 7.30 0.8 884.30 8.8
US silver <SIN9> 15.493 0.268 1.8 11.295 37.2
US platinum <PLN9> 1273.10 -0.10 0.0 941.50 35.2
US palladium <PAU9> 256.00 -2.75 -1.1 188.70 35.7
Prices at 2:38 p.m. EDT (1838 GMT)
Gold <XAU=> 956.55 2.90 0.3 878.200 8.9
Silver <XAG=> 15.37 0.22 1.5 11.30 36.0
Platinum <XPT=> 1264.00 3.00 0.2 924.50 36.7
Palladium <XPD=> 254.50 1.50 0.6 184.50 37.9
Gold Fix <XAUFIX=> 947.50 -6.25 -0.7 836.50 13.3
Silver Fix <XAGFIX=> 15.090 -0.300 -1.9 14.760 2.2
Platinum Fix <XPTFIX=> 1253.00 0.00 0.0 1529.00 -18.1
Palladium Fix <XPDFIX=> 257.00 0.00 0.0 365.00 -29.6
-------------------------------------------------------------
Prices in dollars per ounce.
2008 close for U.S. gold second contract month, U.S. silver and
palladium third contract months and U.S. platinum fourth contract
month.
(Additional reporting by Kylie Maclellan and Jan Harvey in London;
Editing by Marguerita Choy)
