* Gold ends down even as dollar tumbles
* Analysts see eventual return to gold/dollar correlation
* Coming up: Initial US jobless claims for July on Thurs
(Recasts and updates to close of U.S. session; adds byline
and NEW YORK to dateline)
By Barani Krishnan and Jan Harvey
NEW YORK/LONDON, July 6 (Reuters) - Gold hit six-week lows
on Tuesday after the precious metal reacted to an early rebound
in equities to fall below the key $1,200-an-ounce support,
staying there even as the dollar tumbled and stocks later
fell.
Spot gold, which tracks trades in physical bullion, fell to
a session low of at $1,189.30 an ounce, versus the $1,206.95
level seen in New York late on Monday. []
U.S. gold futures' most-actively traded contract, August
<GCQ0>, dropped $12.60, or 1 percent, to finish at $1,195.10 an
ounce. It was the lowest close since May 21 for a benchmark
gold contract traded in New York. []
Gold was initially the only major commodity to show losses
in Tuesday's session as a surge in equities bolstered risk
appetites that prompted investors to buy into other markets and
sell the safe haven.
But as trading drew to a close, markets such as oil [],
soybeans [] and sugar [], which had shown gains
earlier, joined gold on the wayside after investors' focus
returned to Friday's depressing U.S. job numbers for June.
Shares on Wall Street, which had jumped at the open, also
gave back most of their gains. []
The dollar tumbled too, hitting a 1-1/2 month low against
the euro <EUR=> and a near two-month low versus a basket of
major currencies <.DXY> . []
Gold usually moves in tandem with the euro and in opposite
direction to the dollar, but that relationship has broken down
numerous times this year on volatile trades sparked by concerns
over the slow U.S. jobs market and global economy.
"It appears to me that we are coming to the end of this
wave of unwinding of the gold/euro spread," Frank McGhee, head
precious metals trader at Chicago's Integrated Brokerage
Services, said, referring to a popular play in gold.
"This is a healthy correction for the market. I think when
this movement is finished, we will fall back into a more normal
pattern where gold will once again rally against a weaker
dollar," McGhee said.
Analysts said initial data on U.S. unemployment claims for
July, due on Thursday, was expected to lend direction to the
dollar, gold and other commodities. []
GAINS EXPECTED
Over the longer term, uncertainty over the direction of the
global economy and other factors could also send gold higher,
said some analysts who saw the metal ending the year at record
peaks above $1,300 an ounce.
"Given the host of different factors -- ranging from
concerns over the shape of economic recovery to fears of
inflation supporting gold prices -- remain unhinged
(irrational), we would expect gold prices to test higher highs
as the year unfolds," Barclays Capital said in a note.
Physical gold demand picked up a touch after last week's
correction from record highs, as the metal became more
affordable for buyers.
Indian buying continued as traders in the world's biggest
gold consumer picked up bargains ahead of a second round of
festivals and watched the rupee for direction, dealers said.
[]
Silver <XAG=> was at $17.65 an ounce versus $17.75,
platinum <XPT=> at $1,482.50 an ounce against $1,506.50 and
palladium <XPD=> at $426 versus $428.
"Since late May, a significantly lower platinum price has
prompted very real demand, both industrial and for jewellery,"
said UBS analyst Edel Tully in a note.
"Chinese jewellery demand -- as measured through platinum
turnover on the Shanghai Gold Exchange -- has been particularly
apparent since mid May," Tully said.
Prices at 4:41 p.m. EDT (2041 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCQ0> 1195.10 -12.60 -1.0% 9.0%
US silver <SIU0> 17.857 0.138 0.0% 6.0%
US platinum <PLV0> 1518.70 15.10 1.0% 3.2%
US palladium <PAU0> 440.40 13.50 3.2% 7.7%
Gold <XAU=> 1192.50 -14.45 -1.2% 8.8%
Silver <XAG=> 17.80 0.05 0.3% 5.7%
Platinum <XPT=> 1514.50 8.00 0.5% 3.3%
Palladium <XPD=> 436.00 8.00 1.9% 7.5%
Gold Fix <XAUFIX=> 1195.00 -15.75 -1.3% 8.2%
Silver Fix <XAGFIX=> 17.85 0.00 0.0% 5.1%
Platinum Fix <XPTFIX=> 1509.00 12.00 0.8% 2.9%
Palladium Fix <XPDFIX=> 432.00 7.00 1.6% 7.5%
(Editing by Lisa Shumaker)
