* Gold supported by oil rally, better US housing data
* Wall Street mixed, fails to lift metals sharply higher
* Gold/silver ratio increase does not signal weak commods
(Recasts, updates with closing prices, market activity,
changes dateline from LONDON)
By Frank Tang
NEW YORK, July 17 (Reuters) - Gold futures finished higher
on Friday, helped by a crude oil rally, but bullion investors
remained cautious absent definite signs of economic recovery
and rising inflation.
"Until we can get a solid close above the $950 to $960
level, gold will be in broad trading range. I am looking for
some further consolidation going into next week," said Ralph
Preston, futures analyst at California-based
HeritageWestFutures.com.
A brighter outlook for the financial sector amid economic
optimism has underpinned the gold market this week. The metal,
viewed as an inflation hedge, has been weighed down by the
prospect of deflation, or a downward spiral in prices.
On Wednesday, gold scaled a two-week after rising toward
$950 an ounce as a faster-than-expected pace of U.S. inflation
sent Wall Street nearly 3 percent higher.
U.S. stocks traded slightly lower on Friday after a mixed
bag of corporate earnings results.
U.S. August gold futures <GCQ9> settled up $2.10 at $937.50
an ounce on the COMEX division of the New York Mercantile
Exchange.
Spot gold <XAU=> traded at $938.20 an ounce at 3:37 p.m.
EDT (1937 GMT), against $936.35 in its previous session
finish.
Bullion was initially pressured on Friday as the dollar
index <.DXY>, which values the U.S. currency against six
others, strengthened. []
"Most bullion moves have been largely currency driven and
the market is having to closely watch dollar index movement,"
said Richcomm Global Services senior analyst Pradeep Unni.
"Any uptick in the dollar index would clearly mean gold
would have to give up its gains," he added.
Oil jumped nearly $2 toward the $64 a barrel mark after
U.S. data showed the housing sector was starting to stabilize,
boosting interest in the industrial commodities. Base metals
prices also swung higher. [] []
Firmer crude prices support interest in gold as a hedge
against oil-led inflation, and signal firm demand for
commodities as an asset class.
But demand for both investment gold and jewelry remained
soft during the summer lull.
Holdings of the largest gold exchange-traded fund, the SPDR
Gold Trust <GLD>, inched up 0.31 tonnes on Thursday. However,
London's ETF Securities said it saw an outflow of nearly 40,000
ounces that day from its ETFS Physical Gold <PHAU.L> product.
LOSSES RECOVERED
Elsewhere silver <XAG=> was at $13.37 an ounce against
$13.27. The metal has largely recovered the losses that took it
to a 10-week low on Monday, as a slip in the dollar lifted gold
prices and investors took advantage of low prices to buy.
A sharp rise in the gold-to-silver ratio shows that
silver's unique investment and industrial appeal has faded. But
this increase, unlike previous ones, does not portend further
weakness in the precious metals complex. [].
The ratio of gold to silver eased to 70.8 on Friday, after
rising to nearly 73 on Monday. At the height of gold and
silver's rally on June 3, it fell as low as 60.1.
Platinum <XPT=> was at $1,171.50 an ounce against $1,160.50,
while palladium <XPD=> was at $246.50 against $245.50.
In South Africa, source of four-fifths of the world's
platinum, the National Union of Mineworkers said it had
rejected an improved 8.5 percent pay increase offer from Impala
Platinum <IMPJ.J>. []
Three South African trade unions on Thursday declared a pay
dispute with utility Eskom <ESCJ.UL>. []
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 937.50 2.10 0.2 884.30 6.0
US silver <SIN9> 13.398 0.168 1.3 11.295 18.6
US platinum <PLN9> 1168.60 5.90 0.5 941.50 24.1
US palladium <PAU9> 249.60 -0.65 -0.3 188.70 32.3
Prices at 3:54 p.m. EDT (1954 GMT)
Gold <XAU=> 936.10 -0.25 0.0 878.200 6.6
Silver <XAG=> 13.37 0.10 0.8 11.30 18.3
Platinum <XPT=> 1171.50 11.00 0.9 924.50 26.7
Palladium <XPD=> 246.50 1.00 0.4 184.50 33.6
Gold Fix <XAUFIX=> 937.50 2.50 0.3 836.50 12.1
Silver Fix <XAGFIX=> 13.160 -0.050 -0.4 14.760 -10.8
Platinum Fix <XPTFIX=> 1165.00 0.00 0.0 1529.00 -23.8
Palladium Fix <XPDFIX=> 245.50 0.00 0.0 365.00 -32.7
