(Recasts with quotes, prices, changes dateline, pvs SINGAPORE)
By Atul Prakash
LONDON, June 2 (Reuters) - Gold prices climbed on Monday as
investors took advantage of a slight fall in the dollar to snap
up the metal, but weaker oil prices capped gains.
Investors awaited U.S. economic data that is likely to
affect the dollar and, in turn, precious metals.
Spot gold <XAU=> rose as high as $893.80 an ounce and was
quoted at $892.00/892.50 at 0956 GMT, against $885.95/887.55 in
New York late on Friday, when the metal closed 1 percent higher
after touching a two-week low.
"As we approach the summer season, gold appears to be
trading within contracting ranges and we could look forward to a
repeat of last week's choppy sideways action," said David
Holmes, director of precious metals sales at Dresdner Kleinwort.
"Despite a pattern of lower highs and lower lows since
March, the bullish story remains intact," he said, adding an
absence of follow-through selling in Asia prompted investors to
buy the metal.
Analysts said bullion investors would continue to track the
dollar for short-term direction. The U.S. currency slipped after
trading 0.2 percent higher against the euro, having struck a
two-week high on Friday.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
Oil fell more than $1 to around $126 a barrel, as traders
shrugged off Tropical Storm Arthur, which marked the start of
the Atlantic hurricane season by shutting two Mexican oil ports.
FOCUS ON U.S. DATA
"Economic data from the U.S. will again have a bearing on
market direction this week," James Moore, precious metals
analyst at theBullionDesk.com said in a market report.
"For now gold will remain vulnerable to oil/dollar-driven
profit taking, and could potentially retest the recent lows
around $845. However, given the recent round of risk reduction,
we would expect investors to view sub-$900 gold favourably."
Investors will look to the Institute for Supply Management's
manufacturing index later in the day for a snapshot of the U.S.
factory sector. The ISM index is expected to be 48.5 in May,
little changed from 48.6 in the previous month and showing mild
contraction in manufacturing. []
In other bullion markets, gold futures for August delivery
<GCQ8> on the COMEX division of the New York Mercantile Exchange
rose $2.1 an ounce to $893.60 an ounce in electronic trading.
Spot platinum <XPT=> rose to $1,992/2,012 an ounce from
$1,987.50/2,007.50 in New York late on Friday. Silver <XAG=> was
last at $16.85/16.91 an ounce, up from $16.80/16.86, while
palladium <XPD=> rose 50 cents to $429.50/437.50.
In industry news, Aquarius Platinum <AQP.L> said it lost
1,300 ounces in platinum group metals after workers at its
Everest mine in South Africa downed tools in an illegal strike
last week. []
(Reporting by Atul Prakash; editing by Christopher Johnson)
