UPDATE 6-Gold ends slightly lower as oil gains fizzle

* Gold ends lower as oil erases early gains after record
high

* End-of-month position squaring lends weakness to bullion,
gold futures

* ETF buying firm in week to June 29
(Recasts, adds analyst comments, closing prices, market
activity, adds NEW YORK to dateline)

By Frank Tang and Jan Harvey

NEW YORK/LONDON, June 30 (Reuters) - Gold ended lower after
slipping from the five-week high it hit earlier in Monday's
session, as crude oil erased initial gains after rallying to a
record, denting bullion's appeal as an inflation hedge.

However, bullion held by gold-backed exchange-traded funds
(ETFs) has recently increased sharply, signaling longer-term
retail investors are adding positions in the gold market in
spite of price weakness.

Gold <XAU=> was at $925.95/927.15 by New York's last quote
at 2:15 p.m. EDT (1815 GMT), down from $927.20/928.20 an ounce
late in New York on Friday. Earlier it touched a session high of
$935.00 an ounce, its firmest level since May 22.

Analysts cited profit-taking and a bounce in the dollar for
gold's weakness on Monday.

"The dollar has come back, (and) gold has made good gains in
the last couple of days, so we would expect to see it lightening
up a tad," said BNP Paribas analyst David Thurtell.

A firmer dollar tends to pressure gold, which is often
bought as a hedge against weakness in the U.S. currency. A
stronger greenback also makes dollar-priced commodities more
expensive for holders of other currencies.

The other main external driver of gold, oil, ended a tad
lower on Monday but is still underpinning precious metals. Crude
hit a new record of $143.67 a barrel on rising tension between
Iran and Israel. [ID:nSYD57653]

Rising crude prices boost gold's appeal as a hedge against
oil-led inflation, as well as fueling investment interest in
commodities in general.

The stock market slide of late last week is also benefiting
commodities as an asset class as traders seek alternative
investments, analysts said.

"Equities doing so badly over the last week has been good
for commodities in general, and in terms of credit, default
spreads have been rising," said Standard Bank analyst Walter de
Wet. "That supports gold."

GOLD ETF HOLDINGS RISE

Investment interest in gold was firm last week, with inflows
into exchange-traded funds rising.

SPDR Gold Trust GLD.P, the world's largest bullion-backed
exchange-traded fund, said its gold holdings rose by 2.5 percent
on Friday, and were up 4.5 percent week-on-week.
[ID:nL30340198]

SPDR, which launched a new listing on the Tokyo Stock
Exchange on Monday, now holds 644.16 tonnes of gold.

London-based ETF Securities meanwhile said its gold holdings
reached a record high of 1.266 million ounces on Sunday, up 6
percent from the previous week. [ID:nL30620459]

"In the last couple of weeks, you have that big down draft
(in gold) but the ETFs were doing exactly the opposite of what
the futures were doing," said George Gero, vice president of RBC
Capital Markets Global Futures in New York.

Gero also said that the open interest level of U.S. gold
futures were bullish, but buying could lighten ahead of the U.S.
Independence Day holiday on Friday.

U.S. gold contract for August delivery GCQ8 on COMEX
division of New York Mercantile Exchange settled down $3.00 at
$928.30 an ounce.

In other news, Gold Fields Chief Executive Nick Holland told
Reuters he sees the price of gold rising to $1,200 an ounce by
June next year, but added production costs were rising.
[ID:nWEA0620]

Among other precious metals, spot platinum <XPT=> ended at
to $2,059.00/2,079.00 an ounce from $2,053.50/2,073.50 late in
New York.

Spot palladium <XPD=> finished lower at $459.00/467.00 an
ounce from its previous finish of $463.00/471.00 an ounce.
Speculators have booked profits after the price jumped to a
three-month high of $477 on June 19.

Silver <XAG=> was steady at $17.37/17.42 an ounce from
$17.52/17.61 late in New York on Friday. The largest silver ETF
listed in New York, the iShares Silver Trust SLV.A, said its
holdings edged up to 6,002.41 tonnes on June 26 from 5,971.63
tonnes.
(Editing by Matthew Lewis)