PRECIOUS-Gold falls below $950/oz as dollar rallies

                                
 * Gold pressured as dollar rallies for second session
                                
 * Weak jewelry demand at higher prices weigh on gold
                                
 * Platinum hit by uncertain auto demand; investment firm
 (Recasts, updates with quotes, closing prices, changes
dateline, pvs LONDON)
                                
 By Frank Tang
                                
 NEW YORK, June 8 (Reuters) - Gold futures fell below $950
an ounce on Monday as the dollar rose sharply for a second
straight session amid signs of an economic recovery, decreasing
the appeal of bullion as a hedge against the weakening U.S.
currency.
                                
 Platinum group metals tracked gold to drop sharply as a
stronger greenback prompted across-the-board selling in
dollar-denominated commodities. The Reuters/Jefferies CRB
<.CRB> index dropped almost 1 percent.
                                
 "A lot of gold's weakness is dollar related. The market
maybe overdone ... with the fact that everybody is trying to
pick $1,000 last week -- it never materialized again," said
Bruce Dunn, vice president of trading at New Jersey-based
Auramet Trading.
                                
 The dollar has rallied since Friday after data showed
United States lost fewer jobs than expected in May, and recent
better economic indicators also dented gold's status as a safe
haven.
                                
 Investors usually view gold as an insurance against the
falling value of their dollar-denominated portfolios. The
inverse relationship between gold and the dollar broke down
early this year as both assets benefited from a flight to
quality.
                                
 U.S. gold futures for June delivery <GCM9> on the COMEX
division of the New York Mercantile Exchange settled down
$10.10, or 1.1 percent, at $952.50 an ounce. Earlier in the
session, it hit a two-week low of $943.80.
                                
 Spot gold <XAU=> was at $950.75 an ounce at 2:25 p.m. EDT
(1825 GMT), against $955.30 an ounce late in New York on
Friday.
                                
 "There is not much physical demand from jewelers," said
Matthew Turner, analyst at VM Group. "So with a stronger dollar
and a related desire by investors to take the profits they can,
there is not much to keep (gold) up."
                                
 Analysts say current prices are high for consumers in major
jewelry markets such as India, but that buying could resurface
if prices fall to $900 an ounce or lower.
                                
 Investors' appetite for gold also appeared to be waning,
with the bullion holdings of the largest gold Exchange Traded
Fund, New York's SPDR Gold Trust <GLD>, declining on Friday.
[GOL/SPDR]
                                
 Turkey, one of the world's leading gold consumers, said its
imports of the metal fell back to zero in May from 26 kg the
previous month. Abu Dhabi gold sales remained flat, an industry
group said. [ID:nL8582329]  [ID:nL8708730]
                                
 AUTO DEMAND FALL-OFF
                                
 Silver <XAG=> was at $14.91 an ounce against $15.23,
tracking moves in gold. Platinum <XPT=> at $1,235.50 an ounce
against $1,262 late in New York on Friday and palladium <XPD=>
was at $248 against $253.
                                
 The platinum group metals, primarily used in autocatalysts,
followed gold's lead. Platinum and palladium are also under
pressure from the carnage in car manufacturing sector.
[ID:nN02511678]
                                
 "We've seen a bit of a strengthening in the dollar and some
of the consumption side numbers from the auto industry haven't
been that positive," said Societe Generale analyst David
Wilson.
                                
 On the other hand, investors interest in platinum showed
signs of resiliency.
                                
 ETF Securities' platinum and palladium backed ETCs both
grew last week, while Zurich Cantonal Bank's Platinum ETF
<ZPLA.S> added 6,359 ounces or 3.7 percent to its holdings.
                                
 Many commodities analysts said that the price of platinum
represented a bargain compared to gold. Platinum is currently
trading at half of its all-time high $2,290 an ounce reached in
March last year.
                                
                      Close  Change   Pct      2008   YTD
                                
                                      Chg   Close Pct Chg
US gold       <GCQ9>     952.50  -10.10  -1.0   884.30   7.7
US silver     <SIN9>     14.955  -0.433  -2.8   11.295  32.4
US platinum   <PLN9>    1244.00  -42.20  -3.3   941.50  32.1
US palladium  <PAU9>     252.00   -7.80  -3.0   188.70  33.5
Prices at 2:22 p.m. EDT (1822 GMT)
Gold          <XAU=>     950.75   -4.55  -0.5  878.200   8.3
Silver        <XAG=>      14.91   -0.32  -2.1    11.30  31.9
Platinum      <XPT=>    1235.50  -26.50  -2.1   924.50  33.6
Palladium     <XPD=>     248.00   -5.00  -2.0   184.50  34.4
Gold Fix      <XAUFIX=>  943.75  -18.25  -1.9   836.50  12.8
Silver Fix    <XAGFIX=>  14.840  -0.810  -5.2   14.760   0.5
Platinum Fix  <XPTFIX=> 1226.00    0.00   0.0  1529.00 -19.8
Palladium Fix <XPDFIX=>  246.00    0.00   0.0   365.00 -32.6
 (Additional reporting by Jan Harvey, Kylie MacLellan and
Pratima Desai; Editing by Marguerita Choy)