*Lower dollar, firmer oil boost gold
*Gold ends tad higher as U.S. stocks weakens
*Platinum, palladium outlook seen weaker
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Jan Harvey and Frank Tang
LONDON/NEW YORK, July 28 (Reuters) - Gold ended slightly
higher on Monday ahead of key economic data due later this
week, while platinum rebounded following last week's heavy
losses on fears of lower autocatalyst demand because of poor
U.S. auto sales.
Bullion's alternative investment appeal received a boost as
U.S. stocks weakened due to worries about the financial sector.
A lower dollar and oil's rise also lifted the yellow metal.
Gold <XAU=> was at $928.45/929.65 by New York's last quote
at 2:15 p.m. EDT (1815 GMT), up from $927.40/929.40, its level
late in New York on Friday, when it moved in a volatile $16
range.
UBS analyst John Reade said light summer liquidity
conditions were partly to blame for Monday's directionless
trade.
"We have nonfarm payrolls this week, which is always the
biggest event in the forex market," he added. "People tend not
to trade too much ahead of that."
U.S. gold futures for August delivery <GCQ8> settled up 90
cents at $927.70 an ounce on the COMEX division of New York
Mercantile Exchange.
Oil prices meanwhile are underpinning gold. Crude bounced
back after its $20-a-barrel slide of the last two weeks,
boosting interest in gold as an inflation hedge, and in
commodities as an asset class.
Crude futures rose above $124 a barrel on Monday as fresh
attacks on oil installations in major producer Nigeria fuelled
fears over the outlook for supply. []
The dollar also weakened a touch against the euro, adding
to the appeal of gold as an alternative investment, as
investors concluded the U.S. economic climate remains poor.
[]
Investor interest in the metal has steadied.
Holdings of the world's largest gold-backed exchange-traded
fund, the SPDR Gold Trust <GLD>, were unchanged on Monday at
673.4 tonnes. The amount of gold held to back ETF Securities'
Physical Gold ETC <PHAU.L> rose 1 percent week-on-week.
PLATINUM STEADY
Among other precious metals, platinum steadied after a
second week of decline.
The metal has been pressured by fears over weakening demand
as the U.S. and global economic outlook darkened and amid
speculation over the financial health of carmakers in the U.S.
and Japan.
Platinum is widely used by the car industry in
autocatalysts and any sign of a slowdown in the automotive
sector could hit demand for the metal hard.
Supply fears linked to a power shortage in South Africa
also eased after the country's state power utility Eskom said
it sees no further power cuts this year.
The world's top platinum producer AngloPlatinum <AMSJ.J>
said on Monday it will meet its annual production target of
2.40 million ounces -- against 2.47 million last year -- and
expects output to increase significantly in the second half.
Investment bank JP Morgan on Monday cut its 2008 price
target for platinum to $1,885 an ounce from $2,156, and for
2009 to $1,650 from $1,981, citing worsening economic
conditions. []
Michael Jansen, an analyst at the bank, said in a note that
it appears South Africa's major mining companies are "now
coping quite successfully with the power situation."
Spot platinum <XPT=> ended higher at $1,763.00/1,783.00
against $1,745.00/1,765.00 late in New York on Friday.
Spot palladium <XPD=> rose to $385.50/393.50 an ounce from
$380.50/388.50 late in New York.
Jansen added however that "palladium demand is weaker than
platinum demand due to the downsizing taking place in term of
new vehicle purchases in the U.S. right now."
"Hence, while we are short term bearish platinum - looking
for a move down towards $1,500 over the next nine months - the
outlook for palladium is not a great deal better," he added.
Silver <XAG=> was also higher at $17.46/17.52 an ounce from
$17.35/17.43 late in New York on Friday.
(Editing by Marguerita Choy)
