* U.S. ISM manufacturing index contracts in May
* Short covering lifts gold after previous session drop
* Platinum rallies on supply fears, S.Africa mine violence
* Coming up: US international trade data Tuesday
(Adds comment, market details, updates prices)
By Frank Tang and Clara Denina
NEW YORK/LONDON, June 3 Gold jumped nearly 2
percent on Monday, hitting its highest in more than two weeks,
boosted by a tumbling dollar and disappointing U.S.
The precious metal climbed and U.S. equities fell after data
showed the U.S. manufacturing sector contracted in May for the
first time in six months.
Gold and other dollar-denominated commodities gained across
the board after the U.S. dollar index dropped around 1
percent against six major currencies.
"It's a currency move," said Bill O'Neill, partner of
commodities investment firm LOGIC Advisors.
Spot gold was up 1.8 percent to $1,410.59 an ounce by
3:04 p.m. EDT (1904 GMT), having hit a session high of
$1,416.11, its highest since May 15.
U.S. Comex gold futures settled up $18.90 to
$1,411.90 an ounce, with trading volume about 40 percent below
its 30-day average, preliminary data showed.
On Friday, bullion fell almost 2 percent, its steepest daily
decline in about two weeks.
Open interest (OI) in U.S. gold futures fell to the lowest
in almost four years, after last's week sharp drop on option
expiration and decreasing fund interest.
Jeffrey Sica, chief investment officer at Sica Wealth, which
oversees $1 billion in client assets, cited short covering for
the drop in OI. He said that more investors are now using put
option strategies to hedge against their bullion investments.
NONFARM PAYROLLS EYED
U.S. economic data will remain in focus this week, as
Friday's non-farm payroll data for May will provide investors
with more clues about how long the Federal Reserve might keep
U.S. stimulus measures in place.
Strong physical demand appears to keep underpinning gold,
with India importing a much higher-than-expected 162 tonnes of
gold in May.
In May, however, sales of the U.S. Mint's American Eagle
gold coins fell to 70,000 ounces versus 209,500 ounces in April,
after a brief suspension halted the Mint's sales of the
one-tenth ounce bullion coins.
Declines in the holdings of SPDR Gold Trust, the
world's largest gold-backed exchange traded fund, have stopped
after nearly three weeks. Holdings rose last Wednesday and have
been unchanged since.
Silver jumped 2.4 percent to $22.74 an ounce on
Platinum rose sharply on supply worries after news of a
fatal shooting at Lonmin platinum mine in top producer South
Platinum jumped 2.6 percent to $1,493.74 an ounce,
while palladium edged up 0.5 percent to $752.22 an ounce.
The platinum group metals market was digesting the latest
U.S. auto sales data which showed an 8 percent gain in May on
strong pickup truck sales and an improving housing market.
3:04 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold AUG 1411.90 18.90 1.4 1388.30 1416.50 131,232
US Silver JUL 22.721 0.478 2.1 22.175 22.915 39,775
US Plat JUL 1497.40 35.60 2.4 1456.60 1505.60 12,864
US Pall SEP 759.05 5.40 0.7 748.65 763.00 3,457
Gold 1410.59 24.70 1.8 1389.68 1416.11
Silver 22.740 0.530 2.4 22.310 22.960
Platinum 1493.74 38.24 2.6 1461.00 1503.50
Palladium 752.22 3.72 0.5 750.00 760.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 139,955 230,119 181,792 21.27 0.21
US Silver 44,871 63,237 55,512 31.79 -1.74
US Platinum 13,972 11,056 11,651 22.49 -0.01
US Palladium 3,543 6,650 5,568
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by William Hardy, David Gregorio and Chris Reese)