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UPDATE 6-Gold ends firmer on oil gains, bargain hunting

 (Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
 NEW YORK/LONDON, May 23 (Reuters) - Gold bounced on Friday,
capping a week of solid gains on the back of a sharp crude oil
rally and after a drop from a one-month high spurred buying
from bargain hunters.
 Spot gold XAU= was at $925.20/926.60 an ounce by New
York's last quote at 2:15 p.m. EDT (1815 GMT), compared with
$917.60/918.80 an ounce late in New York on Thursday when it
jumped to its highest in more than a month at $935.30 before
falling sharply as oil trimmed gains.
 Bullion has gained nearly 3 percent this week on the back
of record energy prices.
 "If the crude market continues to stay firm, and it looks
like it will, the gold market should follow suit," said one New
York-based precious metals broker.
 He also said that the price of gold should be supported in
the near term as the likelihood of massive profit-taking in
crude oil was slim.
 But still, gold has in the past two months struggled to
sustain the uptrend since spiking to a lifetime high of
$1,030.80 an ounce on March 17, falling to a four-month low of
$845 an ounce in early May as investors booked profits.
 "I don't sense there's huge enthusiasm right now for gold,"
said Stephen Briggs, economist at SG Corporate and Investment
Banking.
 "So I suspect for the moment it's going to remain sort of
tracking inversely, if you like, the dollar," he added.
 Oil rallied to over $133 a barrel on Friday on a weaker
dollar and on nagging concerns about stagnating output in
Russia and other producers outside OPEC. [O/R].
 However, U.S. crude futures CLc1 trimmed gains to end up
$1.38 at $132.19 a barrel.
 The euro slipped to $1.5752 EUR= from around $1.5765 but
it was still up 0.2 percent from late Thursday.
 In theory, expensive oil lifts gold's appeal as a hedge
against inflation.
 "Resistance is still around the $935-$940 area, so unless
we see a retest of that region soon, we may just head down
towards the $900-$905 supports," said Adrian Koh, an analyst at
Philip Futures in Singapore.
 "I think physical buying will probably come around the
supports of $900-$905 levels. But if they think prices will go
up much more, then I think now is a good time."
  U.S. gold futures for June delivery GCM8 on the COMEX
division of the New York Mercantile Exchange settled up $7.50
at $925.80 an ounce.
 In other precious metals, platinum ended unchanged in spite
of its early strength after falling from a two-month high the
previous day as speculators booked profits. Spot platinum
XPT= was essentially flat at $2,156.50/2,176.50.
 "Certainly the fundamentals remain very bullish. Fresh
highs above $2,300 are quite easily on the cards, either in the
next few weeks and certainly the later part of the year," said
James Moore, an analyst at TheBullionDesk.com.
  Refiner Johnson Matthey JMAT.L said this week platinum
could spike to a record high of $2,500 in 2008 due to
production shortfalls and strong demand, and supplies would
likely struggle disruptions main producer South Africa.
 Platinum struck a record of $2,290 an ounce on March 4 due
to power shortage in South Africa which disrupted mining.
 On Thursday, state-owned power utility Eskom warned that
the risk of emergency power cuts had increased significantly
due to technical problems. [ID:nL22155251]
 Spot silver XAG= rose as high as $18.26 an ounce, its
highest level since April 18, to track gains in gold. The metal
was last quoted at $18.18/18.26, compared with $17.92/17.98,
the late quote of Thursday.
 Spot palladium XPD= was weaker at $446/454 an ounce from
its Thursday close of $448/456 an ounce.
 (Editing by Christian Wiessner)


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