* Gold rises in thin holiday trade as dollar falls
* Platinum group metals rise on Chinese demand optimism
* China's lending program seen bullish to PGMs
(Recasts, updates with quotes, market activity; changes
dateline, previously TOKYO)
By Frank Tang
NEW YORK, April 13 (Reuters) - Gold climbed in thin holiday
trade on Monday as the dollar dropped and stock markets
weakened, and platinum rose nearly 3 percent on fund buying and
signs of recovering Chinese demand.
Spot gold <XAU=> was at $895.05 an ounce by 9:53 a.m. EDT
(1353 GMT), up 1.6 percent from Friday's last trade of $880.65.
Bullion fell 1.3 percent last week as some investors unwound
safe-haven positions and moved to other assets, including
stocks.
U.S. gold futures for June delivery <GCM9> rose $14.00, or
1.6 percent, to $897.30 an ounce on the COMEX division of the
New York Mercantile Exchange.
A weaker dollar versus the euro supported gold, as Monday's
decline on Wall Street stirred safe-haven buying in the yellow
metal.
Firmness in bullion also reflected caution over U.S.
corporate earnings, which get into full swing later this week,
traders said.
"Physical demand in the key demand centers, especially Dubai
and India, have started to show marginal recovery as gold prices
has steadied ... Dips are likely to be used as buying
opportunities," said Pradeep Unni, trader at Richcomm Global
Services.
However, one floor trader said that gold could give up
gains if the stock markets continued to trend higher, which
would erode flight-to-quality demand in gold.
Trading volume remained thin as markets in the United
Kingdom and most European countries, Australia and Hong Kong
were shut for the Easter holiday on Monday.
CHINA DEMAND STIRS PLATINUM GROUP METALS
Meanwhile, industrial metals led by copper jumped on Monday
after China's Premier Wen Jiabao said the country's economy is
in a better shape than expected with March industrial output
growth exceeding forecasts. []
China also said new lending and money supply growth both
surged to record highs in March as banks expanded their credit
to rejuvenate the economy. []
Ralph D'Esposito, a NYMEX floor trader, said that China's
latest move would boost its farming sector and stimulate
platinum demand from growing production of minivans and light
trucks.
Platinum and palladium are employed as autocatalysts to
clean exhaust fumes from tailpipes of vehicles.
D'Esposito also cited strong technical buying from
investment funds because of sharply higher spreads between
platinum and gold prices.
"It looks like the funds are buying platinum and selling
gold. (Traders) have to follow their lead at the moment,"
D'Esposito said.
Platinum <XPT=> was at 1,235.50 an ounce, up 2.6 percent
from its last Friday quote of $1,204.50, while palladium <XPD=>
traded at $237 an ounce, up 1.5 percent from its Friday close
of $233.50.
Silver <XAG=> was at $12.69 an ounce, up 3 percent from it
previous finish of $12.32
(Additional reporting by Risa Maeda and Miho Yoshikawa in Tokyo;
Editing by Lisa Shumaker)
