(recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, May 8 (Reuters) - Gold ticked higher on Thursday
helped by strong oil prices, but a firmer dollar capped gains
and prompted investors to trade cautiously ahead of key U.S.
economic data.
Gold <XAU=> was quoted at $871.65/872.35 an ounce at 1022
GMT, against $870.85/872.05 late in New York on Wednesday and
last week's four-month low at $845 an ounce.
"It's hard to see a clear trend at the moment on gold.
Probably we are going to bounce around in the near term," said
Michael Widmer, metals analyst at Lehman Brothers.
Widmer said that if one looks at the macro-economic
environment in the United States, there could still be a case
for people to buy more gold.
But on the other hand, the dollar was slightly stronger on
expectations that the U.S. Federal Reserve might not lower
interest rates further, he added.
A firmer dollar makes gold costlier for holders of other
currencies and often lowers bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
The dollar hit a two-month high against a basket of major
currencies after a Financial Times report said the United States
and Europe now have a united desire to see the dollar strengthen
against the euro, citing officials.
Investors awaited a meeting of the European Central Bank
later on Thursday. Even though interest rates are expected to be
left on hold at 4 percent, markets will be scrutinising every
word from ECB president Jean-Claude Trichet's news briefing at
1230 GMT.
They will also be looking at the release later on Thursday
of U.S. government data for initial jobless benefit claims (1230
GMT) and wholesale inventories (1400 GMT) for an indication of
how the economy is performing. <ECONUS>
OIL SUPPORTS
Gold has lost more than 15 percent in value since spiking to
a lifetime high of $1,030.80 on March 17, mainly driven by
profit taking and declines in other commodities.
"Despite euro weakness, crude oil is a pillar of support for
precious metals. Amid the low trading volumes, gold and silver
prices have been sticky, resisting major downward pressures so
far this week," said Walter De Wet, analyst at Standard Bank.
"We foresee this support continue, which should somewhat
offset downward pressure caused by currency moves."
Oil hit a record high near $124 a barrel. []
In other markets, gold futures for June delivery <GCM8> on
the COMEX division of the New York Mercantile Exchange rose $1.1
to $872.40 an ounce in electronic trading.
Spot platinum <XPT=> rose 1.6 percent to $1,980/1,995 an
ounce from $1,949.50/1,969.50 late on Wednesday.
In industry news, Lonmin Plc <LMI.L>, the world's third
biggest producer, posted a 63 percent jump in first-half profit
on strong prices, but withdrew a long-term output target due to
South African power problems. []
The company, listed in London and with operations in South
Africa, had been aiming to boost output to 1.2 million ounces by
2012 by building new mines, but said on Thursday this was now in
doubt, Chief Executive Brad Mills said.
Silver <XAG=> edged higher to $16.63/16.68 an ounce from
$16.60/16.66, while palladium <XPD=> rose to $426/430 an ounce
from $420.50/428.50 late on Wednesday.
(Reporting by Atul Prakash; editing by Editing by Peter
Blackburn)
