* Gold hits highest since June 11 as dollar weakens
* Oil prices rally, boosted by stocks
* Platinum rises to near six-week high
(Updates prices)
By Jan Harvey
LONDON, July 27 (Reuters) - Gold rose to its highest level
since mid-June on Monday as the dollar weakened, with investors
gaining fresh appetite for currencies seen as higher risk, while
platinum tracked the yellow metal to a near six-week high.
Gold prices remained in a range of $945-960 an ounce,
however, with strong technical resistance towards the $960 mark
and weakness in jewellery and investment demand capping gains.
Spot gold <XAU=> hit a high of $958.70 an ounce and was bid
at $953.80 at 1539 GMT from $950.35 late in New York on Friday.
U.S. August gold futures <GCQ9> on the COMEX division of the New
York Mercantile Exchange rose 70 cents to $953.80 an ounce.
The dollar <.DXY> weakened against a basket of six major
currencies on Monday as stock market confidence rose, and after
U.S. data showed sales of new single-family homes rose more than
expected in June. []
"As long as the dollar remains under pressure due to falling
risk aversion, then gold should also go higher," said
Commerzbank analyst Carsten Fritsch.
He said stronger than expected economic data this week would
weigh on the U.S. dollar, and hence push gold higher. "At the
moment, gold is not behaving like a safe haven, but is moving
higher when risk aversion is declining," he added.
Gold, which is priced in dollars, often becomes cheaper for
holders of other currencies when the U.S. unit weakens.
Oil hit a three-week high as stocks rose on prospects for an
economic recovery that would boost fuel demand. Gains in oil,
the bellwether of the commodities complex, are often followed by
a rise in gold as investors try to price in potential
inflationary risk. []
But physical gold demand, both for jewellery and investment,
is weak during the seasonally slack summer period, dealers said.
Investors in exchange-traded funds stuck to the sidelines,
with holdings of the largest gold ETF, the SPDR Gold Trust <GLD>
unchanged on Friday from the previous session. []
JEWELLERS HOLD OFF
Jewellers in India held off on purchases as prices rose,
while jewellers elsewhere in Asia even sold scrap back onto the
market to take advantage of higher prices. []
However, the Commodity Futures Trading Commission reported a
9 percent rise in non-commercial net long positions in New York
gold futures in the week to July 21. []
While this suggests good support for gold, with speculative
interest heavily reliant on the strength of the dollar, the
metal may have to see a further decline in the U.S. currency
before making fresh gains, analysts said.
"If the dollar were to weaken further, gold can trade
higher, but positions are rather long at the moment, minimising
the upside unless the move is accompanied by strong safe-haven
buying via ETFs and coins," UBS said in a note.
In supply news, Harmony Gold <HARJ.J> said it had stopped
production at a mine shaft in Mpumalanga, South Africa,
following a fatal accident there on Friday. []
Elsewhere the Chamber of Mines said it saw a good
possibility of reaching a wage deal with workers in the South
African gold and coal mining sectors. []
Among other precious metals, silver <XAG=> tracked gold
higher to break through $14 an ounce for the first time since
June 30. It was last bid at $13.98 an ounce against $13.86 late
on Friday in New York.
Platinum <XPT=> rose more than 2 percent to a near six-week
high of $1,219 an ounce, boosted by gains in gold and the softer
dollar. It was later at $1,213.50 against $1,181, while
palladium <XPD=> was at $259.50 against $258.50 an ounce.
The world's biggest platinum producer, Anglo Platinum
<AMSJ.J>, said its first-half production of the refined metal
rose 6 percent from a year before, and reiterated its full-year
target of 2.4 million ounces. []
(Additional reporting by Martina Fuchs; Editing by Sue Thomas)
