(Updates with quotes, New York closing prices, market
activity)
By Atul Prakash and Jan Harvey
LONDON, June 2 (Reuters) - Gold ended higher on Monday as
the dollar softened against the euro and as oil prices finished
higher after rebounding from earlier lows.
Spot gold <XAU=> rose as high as $897.10 an ounce and was
at $891.25/892.65 an ounce by New York's last quote at 2:15
p.m. EDT (1815 GMT), against $885.95/887.55 in New York late on
Friday, when the metal closed 1 percent higher after touching a
two-week low.
"The jury is still out on whether the dollar has commenced
a long-term rebound," said David Thurtell, analyst at BNP
Paribas, adding that people were happy to pick up gold on
dips.
Gold tends to follow moves in the crude price, as it is
often bought as a hedge against oil-led inflation. A weaker
U.S. currency makes dollar-denominated metals cheaper for
holders of other currencies.
Bullion prices have traded within a relatively narrow range
today.
Gold also ignored a report from Standard & Poor's, which in
a sweeping move cut ratings on a number of major U.S.
securities firms, sending U.S. stocks lower. []
In the U.S. gold futures market, the Commodity Futures
Trading Commission (CFTC) said in its latest report that
noncommercial net long positions rose to 191,512 lots in the
week up to May 27, higher than 182,119 lots a week ago.
UBS Investment Bank told clients in a note that gold seemed
much more balanced now, waiting for direction from crude oil or
from the currency market.
SILVER EXPOSED
Meanwhile, oil prices gave a further boost to gold,
climbing by more than $1 a barrel after earlier losses. U.S.
crude futures <CLc1> ended up 41 cents at $127.76 a barrel.
[]
Crude is benefiting from strong technical support and a
healthy market for natural gas and refined oil products.
However, the gold market is expected to remain largely
rangebound in the near future, analysts said.
"At the moment, physical demand is not very strong and in
the summer, investment demand is not strong either," said
Lehman Brothers analyst Michael Widmer.
In other bullion markets, gold futures for August delivery
<GCQ8> on the COMEX division of the New York Mercantile
Exchange settled up $5.50 at $897.00 an ounce.
Among other metals, silver <XAG=> tracked gold higher to
end at $16.82/16.88 an ounce, up from $16.80/16.86 on Friday in
New York. In the medium term, however, analysts said they
expect prices to correct further.
"We believe silver prices are exposed to downside risks
over the forthcoming months in light of the buoyant mine supply
growth projected to come online this year," Barclays Capital
analysts said in a note earlier today.
Spot platinum <XPT=> rose to $2,000/2,020 an ounce from
$1,987.50/2,007.50 in New York late on Friday, while palladium
<XPD=> rose to $432.50/440.50.
Analysts expect platinum prices to be underpinned by the
power crisis in South Africa, the world's largest producer of
the metal used in autocatalysts, which has hit output.
The latest news came from London-listed Aquarius Platinum
<AQP.L>, which said it lost 1,300 ounces in platinum group
metals after workers at its Everest mine in South Africa downed
tools in an illegal strike last week. []
(Additional reporting by Frank Tang in New York)
