* Gold futures end down but off lows as dollar weakens
* Oil's rise toward $72 a barrel boosts bullion
* Physical demand weak, scrap supply emerging, traders say
(Recasts, updates with closing prices, market activity, adds
second byline, dateline, previous LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Sept 10 (Reuters) - Gold futures ended
slightly lower on Thursday but the metal came off the day's
lows as the dollar weakened, while rising oil prices also gave
the metal a lift as a potential inflation hedge.
While gold futures briefly rose above $1,000 an ounce, some
traders expressed disappointment at the market's inability to
sustain this week's stunning run to 18-month highs at
$1,007.45.
"The resumption of dollar weakness has been supportive. The
oil market has also gotten a little succor from the IEA report,
and oil helped to stiffen gold," HSBC metals analyst James
Steel said.
Gold has found favor as a hedge against the potential for
oil-induced inflation, and Steel said while that argument was
keeping prices firm, the reality of higher prices may not
materialize.
"Those that are buying gold on an inflationary argument may
be disappointed, but that could take time to unfold," he
added.
U.S. December gold futures <GCZ9> settled down 30 cents at
$996.80 an ounce on the COMEX division of the New York
Mercantile Exchange. The contract hit a session low of
$983.20.
Spot gold <XAU=> was at $995.35 an ounce at 2:20 p.m. EDT
(1820 GMT), compared with $991.15 late in New York on
Wednesday.
Oil rose above $72, supported by a report from the
International Energy Agency (IEA) that global demand would be
higher than forecast [].
Gold rallied above $1,000 an ounce for only the third time
in history on Tuesday after breaking a number of key technical
resistance levels. News that Barrick Gold <ABX.TO><ABX.N> was
cutting its hedgebook of forward gold sales fueled gains.
[]
The dollar index <.DXY> declined on Thursday after data
showed the number of workers filing new claims for jobless
benefits fell last week. []
The bullion market has relied heavily on dollar weakness
for support. A weak U.S. currency boosts interest in gold as an
alternative asset, and makes the precious metal cheaper for
non-U.S. investors.
Among other precious metals, silver <XAG=> rose to $16.65
from $16.27, platinum <XPT=> was at $1,285.50 against $1,276,
while palladium <XPD=> eased to $288 from its previous finish
of $290.50.
ETF Securities said holdings of its London palladium-backed
exchange-traded fund <PHPD.L> rose 5.5 percent to a record
477,766 ounces, while its gold and silver-backed products also
recorded inflows. []
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCZ9> 996.80 -0.30 0.0 884.30 12.7
US silver <SIZ9> 16.670 0.200 1.2 11.295 47.6
US platinum <PLV9> 1289.70 -1.70 -0.1 941.50 37.0
US palladium <PAZ9> 293.45 -1.60 -0.5 188.70 55.5
Prices at 2:19 p.m. EDT (1819 GMT)
Gold <XAU=> 995.55 4.40 0.4 878.200 13.4
Silver <XAG=> 16.65 0.38 2.3 11.30 47.3
Platinum <XPT=> 1285.50 9.50 0.7 924.50 39.0
Palladium <XPD=> 288.00 -2.50 -0.9 184.50 56.1
Gold Fix <XAUFIX=> 990.75 -8.75 -0.9 836.50 18.4
Silver Fix <XAGFIX=> 16.090 -0.150 -0.9 14.760 9.0
Platinum Fix <XPTFIX=> 1279.00 0.00 0.0 1529.00 -16.4
Palladium Fix <XPDFIX=> 290.00 0.00 0.0 365.00 -20.5
(Additional reporting by Veronica Brown in London; Editing by
Lisa Shumaker)
