UPDATE 6-Gold ends down as dollar up on U.S. home data

* Gold dented as dollar rises after US home data, Trichet

* Oil climbs nearly $2 a barrel on supply concerns

* Platinum, palladium lower after turbulent trade (Recasts, updates with quotes, closing prices, market activity, adds NEW YORK to dateline)

By Frank Tang and Jan Harvey

NEW YORK/LONDON, Aug 7 (Reuters) - Gold ended lower on Thursday as the dollar rebounded against the euro after a surprise rise in June U.S. home sales and comments by European Central Bank President Jean-Claude Trichet.

Platinum retreated after a rise in prices fueled by strike action in South Africa on Wednesday ended a three-session slide that drove prices down some $180 an ounce to six-month lows.

Gold XAU= ended at $871.05/872.45 an ounce by New York's last quote, down from $878.70/879.90 late on Wednesday. Earlier this week the precious metal dropped to a seven-week low as part of a broader commodities sell-off fueled by a firmer dollar.

The U.S. dollar rose to a 5-1/2-month high against a basket of currencies and a seven-week peak versus the euro, bolstered by a surprise rise in June home sales and diminished expectations for euro-zone interest rate increases.

"There is less and less likelihood that the ECB will hike rates ... and, of course, that is weighing on the euro," said Dresdner Kleinwort consultant Peter Fertig. "(That) leads to a firmer U.S. dollar, which is negative for gold."

"As we fully expect that the euro is going to weaken considerably, we expect gold will remain under pressure," he added.

Gold typically moves in the opposite direction to the dollar, as it is often used as a hedge against weakness in the U.S. currency.

U.S. gold futures for December delivery GCZ8 settled down $5.10 at $877.90 an ounce on the COMEX division of New York Mercantile Exchange.

Oil, the other main external driver of gold, ended $1.44 higher at $120.02 a barrel, recovering from three-month lows.

Firmer crude prices usually benefit gold, which can be bought to hedge against oil-led inflation. While Thursday's price rise supports gold, analysts warn the oil market remains fragile.

In top gold producer South Africa, gold output fell 12.3 percent in volume, while overall mineral production fell 6.3 percent in June year-over-year. [ID:nWEA5111]

DEHEDGING SET TO SLOW

Analysts fear gold prices could be set to lose a key source of support as the rate slows at which miners buy back gold they have sold forward. The process, known as dehedging, has been a key source of demand in recent years.

Gold miners cut their hedging positions by 16 percent in the second quarter of 2008, but the rate of dehedging is likely to slow in the second half of the year, a report sponsored by Fortis Bank said on Thursday. [ID:nL7121238]

Among other precious metals, platinum posted small losses in sympathy with gold, but was largely steady after Wednesday's price rise, which snapped a three-session, $180 run of losses.

While traders remain worried about the outlook for the car industry, source of 50 percent of platinum demand, Wednesday's strike among South African workers has refocused attention on supply issues.

"Losses in this market have been overdone, especially given the potential threats to supply (that remain), particularly in South Africa," said Barclays Capital in a note.

Spot platinum XPT= ended lower at $1,572.00/1,592.00, down from $1,594.50/1,614.50 late in New York on Wednesday.

Spot palladium XPD= finished at $343.00/351.00 an ounce, down from $349.50/357.50 late in New York. Silver XAG= slipped to $16.18/16.25 an ounce from its previous finish of$16.51/16.57.