* Dollar hits five-month high vs euro
* Commodities decline almost across the board
* Silver slips to 6-1/2-month low, tracking gold
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 8 (Reuters) - Gold slipped 1 percent to its
weakest point in eight weeks on Friday as the dollar firmed to a
five-month high against the euro, denting the precious metal's
appeal as a currency hedge, and as oil prices fell.
Gold <XAU=> was at $861.40/862.40 an ounce at 0957 GMT, down
from $871.05/872.45 late in New York. Earlier the metal hit a
session low of $860.95 an ounce, an eight-week trough.
Commerzbank trader Rory McVeigh said the precious metal's
decline was down to "dollar strength today, (with) dwindling
commodity prices as a backdrop".
Commodities are posting losses almost across the board, with
copper, coffee, sugar and oil all declining.
Crude slipped more than $1 a barrel as supply fears eased,
and as the firmer dollar prompted funds to exit commodities.
[]
Barclays Capital said in a note: "The summer doldrums have
well and truly hit the commodity markets."
"Sentiment has turned extremely negative and prices have
fallen across a broad range of different markets, irrespective
of differing fundamental dynamics and outlooks."
The commodity markets are being pressured by concern over
the growth outlook in the OECD and worries over falling oil
prices, the bank said, as well as regulatory risk.
While the sell-off of commodities is pressuring gold, the
precious metal will chiefly take its cue from the currency
markets on Friday, analysts said.
The dollar is holding near a five-month high against the
euro, which has been weakening since European Central Bank
president Jean-Claude Trichet expressed caution over the growth
outlook on Thursday. []
Traders interpreted his comments as a sign a euro zone rate
hike is unlikely in the near future.
The U.S. currency also surged against the pound, while the
dollar index struck a five-month high as the economic global
slowdown dented confidence in other currencies.
SIX-MONTH SILVER LOW
Silver declined in gold's wake, pressured by the firmer
dollar and faltering investor confidence in commodities.
Silver bullion held by the iShares Silver Trust <SLV.A>, the
world's largest silver-backed exchange-traded fund, fell 1
percent to 6,197.33 tonnes on Thursday, the trust said.
Spot silver <XAG=> fell to $15.77/15.82 an ounce from
$16.14/16.23. Earlier it touched a 6-1/2-month low of $15.73 an
ounce.
Among other precious metals, spot platinum <XPT=> eased to
$1,559.00/1,579.00 an ounce from $1,572.00/1,592.00 late in New
York.
The metal has steadied since falling sharply at the
beginning of the week to fresh six-month lows. Platinum prices
dropped $180 an ounce in three sessions as investors worried
over the outlook for demand.
"We do not see a substantial and sudden recovery in platinum
prices in this environment as falling demand brings the
supply/demand deficit closer to balance and as ETF sales push
prices lower," said Fairfax analyst John Meyer.
Spot palladium <XPD=> dipped to $340.00/348.00 an ounce from
$344.00/352.00 late in New York.
(Reporting by Jan Harvey; editing by Christopher Johnson)
