* Equity market gains weigh on gold
* Platinum boosted by Johnson Matthey report
* London, Swiss platinum ETF holdings fell last week
(Adds comment, updates prices)
By Rebekah Curtis and Jan Harvey
LONDON, May 18 (Reuters) - Gold prices slipped on Monday as
stock markets bounced, denting the precious metal's appeal as a
haven from volatility in other markets.
Nonetheless, prices are within sight of the seven-week high
they hit on Friday, with analysts expecting concerns about
inflation and the economy to underpin the precious metal's
credentials as a hedge against uncertainty.
Platinum rose after refiner Johnson Matthey released its
influential annual report which highlighted expectations of
strong Chinese jewellery demand, outweighing weakness in North
American and European jewellery markets, traders said.
Spot gold <XAU=> was bid at $921.50 an ounce at 1544 GMT,
compared with $930.70 late in New York on Friday. U.S. gold
futures for June delivery <GCM9> on the COMEX division of the
New York Mercantile Exchange fell $8.60 to $922.70 an ounce.
A higher opening by U.S. stocks eroded gold market
sentiment. [] "Gold is tracking equities inversely," said
Citigroup analyst David Thurtell. The relationship between the
two was "holding solidly for now", he said, "and is likely to do
so while confidence is still fragile."
However, analysts said the impact of firmer equities was
likely to be brief. Gold is still within reach of the high of
$933.65 it hit on Friday, its firmest in seven weeks, after data
showed U.S. core inflation in April rose more than expected.
"The outlook for gold is a lot better than the outlook for
the U.S. economy," said Charles Kernot, a 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)."
Traders said rising oil prices <LCOc1>, which could feed an
inflation spiral, would help bolster gold market sentiment.
[]
PLATINUM EYED
Platinum slipped briefly after Johnson Matthey gave a wide
range in the price forecast in its annual report, saying prices
could move between $950 and $1,350 over the next six months.
[]
The report is the centrepiece of the annual gathering of
leading figures in the platinum industry for the annual Platinum
Week event in London this week. []
Platinum <XPT=> later rose more than 2 percent to $1,123 an
ounce, compared with $1,100.50 an ounce late in New York on
Friday. Platinum group metals languished in 2008 due to problems
in the auto sector.
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.
Speaking to Reuters on Monday, Anglo Platinum <AMSJ.J> Chief
Executive Neville Nicolau said he expects the company to at
least break even this year, and stuck to the company's annual
production target of 2.4 million ounces. []
Palladium <XPD=> was bid at $226 from Friday's $222.50,
while silver <XAG=> was at $13.77 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," Standard Bank said in a note.
Platinum ETFs reported outflows last week after a period of
relative stability. Holdings of ETF Securities' Physical
Platinum fund <PHPT.L> dipped 13.6 percent in the week to
Friday, while Zurich Cantonal Bank said its platinum ETF
<ZPLA.S> holdings edged down to 170,247. []
(Additional reporting by Pratima Desai; Editing by Sue Thomas)
