* Gold hits highest since June 11 as dollar weakens
* Oil prices rally, boosted by stocks
* Platinum moves near six-week high on demand outlook
(Recasts, updates prices, market activity to New York
close; adds second byline, dateline, previously LONDON)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, July 27 (Reuters) - Gold rose to its
highest level since mid-June on Monday as the dollar weakened,
with investors seeking out higher risk, while platinum's move
up near a six-week high offered support.
"The strength in platinum may have spilled over into gold
somewhat, said HSBC metals analyst and senior vice president
James Steel, adding "Anglo Platinum's CEO gave a report today
and said he thought the market would move into a deficit. That
ramped platinum up and lent some support to gold."
Gold prices remained in a range of $945-960 an ounce, with
strong technical resistance toward the $960 mark and weakness
in jewelry and investment demand capping gains.
Spot gold <XAU=> hit a high of $958.70 an ounce and was bid
at $953.25 an ounce by 2:59 p.m. EDT (1859 GMT) from $951.05
late on Friday.
U.S. August gold futures <GCQ9> closed with small gains of
40 cents an ounce at $953.50 an ounce on the COMEX division of
the New York Mercantile Exchange.
Sharp declines in the dollar against the euro spurred gold
buying early and supported the metal when sellers came in.
Declines in the U.S. currency boost the value of
dollar-denominated gold in non-dollar currencies.
The dollar dropped to its lowest level in more than seven
weeks against the euro as a jump in U.S. new home sales
bolstered the market's risk appetite and lowered the
greenback's safe-haven appeal. []
Sales of new single-family homes in the United States rose
by 11 percent in June from the previous month, exceeding
expectations, while the inventory of homes for sale fell to an
11-year low, government data showed on Monday. []
"As long as the dollar remains under pressure due to
falling risk aversion, then gold should also go higher," said
Commerzbank analyst Carsten Fritsch.
"At the moment, gold is not behaving like a safe haven, but
is moving higher when risk aversion is declining," he added.
While gold dipped after the U.S. housing data as some
investors unwound safe-haven plays, prices returned to positive
levels when the dollar fell further and with added support from
higher oil and equity prices, analysts said.
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. []
"I think the gain in oil and the decline in the dollar
would also help explain the rally. And the housing data would
explain why gold came down a little bit," said Steel.
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.
[]
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 up
to break above $14 an ounce for the first time since June 30.
Spot silver <XAG=> was up at $14.02 an ounce in late New
York business, up from $13.84 on Friday in New York.
Spot platinum <XPT=> rose more than 2 percent to a near
six-week high of $1,219 an ounce and held those gains to trade
at $1,217 in late New York trade, up from $1,185 on Friday.
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. []
Angloplat's Chief Executive Nicolau said following the
report that he saw the price of platinum rising above $1,200 an
ounce for the rest of the year on robust platinum jewellery
sales in China, investment demand and a recovering car sector.
About 60 percent of all platinum is used in autocatalysts
to clean vehicle exhaust emissions.
Palladium <XPD=> rose to $259.50 an ounce from $255.50 in
late Friday trade.
(Additional reporting by Carole Vaporean and Martina Fuchs;
Editing by David Gregorio)
