* Concerns about rising prices support gold
* U.S. housing data eyed for clues on sector's stability
* Holdings of SPDR gold ETF <XAUEXT-NYS-TT> unchanged
(Recasts, updates prices, adds Johnson Matthey survey)
By Rebekah Curtis
LONDON, May 18 (Reuters) - Gold was softer on Monday but
holding within reach of a seven-week high as inflation and
economic fears boosted its appeal as a hedge against
uncertainty.
Also a focus in precious metals markets was a gathering of
leading figures in the world world platinum industry for the
annual Platinum Week event in London this week. []
Spot gold <XAU=> was bid at $928.50 an ounce at 1236 GMT,
compared with $930.70 late in New York on Friday, when it
touched $933.65, its highest level in seven weeks, after data
showed U.S. core inflation in April rose more than expected.
Also supportive were doubts about economic recovery,
especially in the United States, the world's largest economy.
"The outlook for gold is a lot better than the outlook for
the U.S. economy," said Charles Kernot, mining analyst at
Evolution Securities. "There is still a lot of uncertainty in
terms of the outlook for the global economy...People are now
looking at it being a much slower recovery (than expected)."
Investors looking for further clues on the health of the
world's biggest economy will keep an eye on the U.S. National
Association of Home Builders' May housing market index, due at
1700 GMT.
Nevertheless, U.S. economic data on Friday offered some
evidence that the recession's worst phase could be over, with
the April consumer price unchanged and industrial output
declining at a slower pace than in March. []
Kernot added that precious metals will be at the forefront
of investors' minds as Monday marks the start of London's annual
platinum week gathering.
PLATINUM EYED
Platinum slipped briefly after refiner Johnson Matthey gave
a very wide range in the price forecast published in its
influential annual report, saying prices could move between $950
and $1,350 over the next 6 months. []
Platinum <XPT=> was later steady at $1,105 an ounce,
compared with $1,100.50 an ounce late in New York on Friday.
Johnson Matthey said demand from the auto sector, a major
platinum user, and from the glass and chemical industries was
set to decline this year as the economic downturn persists.
Platinum slipped nearly 4 percent last week in a market
affected by economic uncertainty. Platinum group metals
languished in 2008 due to problems in the auto sector.
Palladium <XPD=> was bid at $225 from Friday's $222.50,
while silver <XAG=> was at $13.82 an ounce from $13.93.
Johnson Matthey said palladium sales from Russian state
stockpiles could keep the market in surplus for at least another
year. []
"For both platinum and palladium, the rapid ramp-up in ETF
holdings has slowed significantly. As with gold, we believe the
slowdown is due to the rally in equity prices since the middle of
March," Walter de Wet, a strategist at Standard Bank, said in a
note.
Investors were hesitant to pile more money into gold,
keeping holdings at the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust <GLD>, unchanged at
1,105.62 tonnes as of May 15. []
(Additional reporting by Pratima Desai; Editing by Anthony
Barker)
