* Gold turns lower as dollar erases losses vs euro
* Coeur CEO expects investment to lift silver prices
* Platinum shakes off expected GM bankruptcy filing
(Recasts, updates prices, market activity to close; new
byline, changes dateline from LONDON)
By Frank Tang
NEW YORK, June 1 (Reuters) - Gold futures ended slightly
lower on Monday, but bullion remained within striking distance
of $1,000 an ounce as currency weakness could still bolster the
status of gold as a hedge against a falling dollar.
Gold prices earlier reached their highest level since late
February on the back of dollar weakness.
The euro traded at its highest level of this year at above
$1.42 before the greenback briefly erased losses in thin
afternoon trading due to profit-taking.
"I think the recent weakness of the dollar is driving the
gold price right now," said Caesar Bryan, who manages more than
$450 million in assets at GAMCO Gold Fund in New York.
Investors viewed gold as 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 safety.
U.S. August futures <GCQ9> settled down 30 cents at $980 an
ounce on the COMEX division of the New York Mercantile
Exchange. The contract reached a peak of $990.20, which marked
the loftiest price since Feb. 25.
Spot gold <XAU=> was at $976.85 an ounce at 3:25 p.m. EDT
(1925 GMT), lower than a late Friday quote of $978.20 in New
York.
Earlier, data showing Chinese industrial activity grew in
May helped offset news that General Motors filed for bankruptcy
protection. The Chinese data fueled gains in industrial
commodities and boosted stock market indexes to their highest
levels in seven months. []
Oil rose more than 3 percent to a near seven-month high of
more than $68 per barrel, as stock market optimism and
sustained hopes for an economic recovery extended its biggest
monthly gain in a decade. []
COMMODITIES UPBEAT
"Commodities generally are upbeat at the moment," said
Simon Weeks, director of precious metals at the Bank of Nova
Scotia. "People are definitely buying hard assets as opposed to
hard currencies."
Gold is an attractive investment for both bulls and bears
on the economic outlook, he said.
Data released Friday showed a hefty rise in speculative net
long positions on New York's COMEX futures exchange. However,
this may leave gold vulnerable to a correction as such
positions are easily liquidated, analysts said.
[]
Silver <XAG=> tracked gold up to a near 10-month high of
$15.94 an ounce. It was last at $15.60 an ounce, down 0.9
percent from its previous finish of $15.74.
The chief executive of Coeur d'Alene Mines Corp <CDE.N>
predicted that the price of silver will rise further in 2009
following a sharp rally in May, fueled by a combination of
rising investor interest, recovering industrial demand and flat
industry output. []
The platinum group metals largely ignored the expected
bankruptcy filing of GM <GM.N>, which is now owned by the U.S.
government. Auto industry demand accounted for about 60 percent
of platinum demand as catalytic converters for vehicles.
Platinum <XPT=> was at $1,207.50 an ounce, up 1.7 percent
from late Friday, and palladium <XPD=> was at $239.50 an ounce
against its last finish of $234.
(Additional reporting by Jan Harvey and Pratima Desai; Editing
by Lisa Shumaker)
