* Gold ends higher on weak dollar but off session peaks
* Platinum slips lower as demand fears weigh
(Recasts, updates prices, market activity to New York close,
adds new byline, second dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, July 21 (Reuters) - Gold ended firmer on
Monday as a combination of a weaker dollar and crude oil gains
prompted investors to buy bullion as an alternative
investment.
Gold <XAU=> was at $961.75/963.15 an ounce by New York's
last quote at 2:15 p.m. EDT (1815 GMT), up from $955.45/957.05
late on Friday, when it hit a one-week low of $949.50.
A lower dollar against euro and other major currencies and
more than a $2 per barrel gain in crude oil prices took gold as
high as $968.25 during the session.
But gold gave back some gains as the dollar firmed against
the euro after Bank of America reported stronger-than-expected
quarterly earnings, helping allay fears about the health of the
U.S. financial sector. []
Better performance of financial stocks have pressured gold
prices, said James Steel, metals analyst at HSBC in New York.
U.S. gold futures for August delivery <GCQ8> settled up
$5.70 at $963.70 an ounce on the COMEX division of New York
Mercantile Exchange.
"Early U.S. dollar weakness and oil price strength has been
reversed, (taking) the top off the gold price," said David
Thurtell, an analyst at BNP Paribas.
Gold tends to move in the opposite direction to the dollar,
as is bought as a hedge against weakness in the U.S. currency.
A softer greenback also makes dollar-priced gold cheaper for
holders of other currencies.
The precious metal also usually trades in line with oil,
because of its appeal as an inflation hedge. Strength in crude
prices also boosts commodities in general.
Oil rose more than $2 a barrel early on Monday after as
talks over Iran's nuclear programme ended in a stalemate,
dampening hopes the row would be resolved soon. Last week was
oil's biggest one-week slide on record.
U.S. crude futures <CLc1> ended $2.16 higher at $131.04 a
barrel.
Fears of further unrest in the Middle East also supported
gold, often bought as a hedge against geopolitical risk.
Platinum gave up gains posted earlier in the session amid
bargain hunting. Platinum last week dipped more than $180 an
ounce, or 9 percent, on demand fears and expectations that
supply disruptions linked to a power shortage in major producer
South Africa would be milder than expected.
Platinum rebounded early from a low of $1,836.50 it hit on
Friday -- its weakest level since May 2 -- as buyers took
advantage of falling prices.
"After its slump last week platinum should bottom now,"
Commerzbank analysts said in a note. "Despite all the concerns
about weaker demand from the car industry and the lower risks
to supply, there is still a deficit on the platinum market."
Spot platinum <XPT=> was trading at $1,837/1,857 an ounce
from $1,846.50/1,866.50 late in New York on Friday. Among other
precious metals, spot palladium <XPD=> was a tad lower at
$410.00/418.00 an ounce from $411.50/419.50 late in New York,
while silver <XAG=> rose to $18.36/18.44 an ounce from
$18.12/18.20 late in New York.
(Editing by David Gregorio)
