* Bullion reaches 6-week high on ETF buying - traders
* Gold rises despite dollar rise
* Silver fabrication falls 1 pct on industrial slowdown
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, May 13 (Reuters) - Gold rose on Wednesday,
reaching a six-week high, as buying by exchange-traded funds
and losses in the stock markets boosted interest in the metal.
Spot gold <XAU=> earlier touched a peak of $930.40 an
ounce, its highest price since April 1, and was at $926.20 an
ounce at 2:27 p.m. EDT (1827 GMT), up 0.5 percent from its late
Tuesday quote of $921.85 an ounce in New York.
U.S. gold futures for June delivery <GCM9> settled up $2 at
$925.90 an ounce on the COMEX division of the New York
Mercantile Exchange.
"At the opening of stocks in New York, we heard some buying
went through on the ETF, so gold started picking up again,"
said Afshin Nabavi, head of trading at MKS Finance in Geneva.
Demand for precious metals from exchange-traded funds,
which issue securities backed by physical stocks of metal, has
been a key factor supporting prices in the last year.
"The type of buying that we have been seeing in the morning
suggested that there was some ETF buying," said Andrew Montano,
a director at ScotiaMocatta.
Possible unwinding of trade positions based on the
gold/silver ratio also lent support to gold, Montano said.
Holdings of the world's largest ETF, New York's SPDR Gold
Shares <GLD> were steady at 1,104.09 tonnes as of Tuesday.
[]
Gold managed to shrug off gains in the dollar, which
recovered lost ground after slipping to a four-month low
against a basket of currencies and a seven-week trough versus
the euro earlier. []
Like all dollar-priced commodities, gold becomes cheaper
for holders of other currencies as the U.S. unit weakens.
A more than 2 percent decline on Wall Street, measured by
the broad S&P 500 index, also kept the status of gold as a safe
haven intact, traders said.
Underlying demand for gold remains relatively lackluster.
Dealers say bullion buying in India, the world's biggest gold
consumer, is sluggish at higher prices. []
INVESTOR APPETITE
Commodities such as oil and base metals as well as gold
have recently risen, however, on the weaker dollar and hopes
the economic downturn may be bottoming out.
Oil, however, turned lower despite a weekly U.S. report
showed a fall in crude inventory. []
"Investment in commodities is growing," said broker MF
Global in a note. "The rise in interest explains the ability of
commodity markets such as gold and oil to remain relatively
strong despite disappointing fundamental news."
But doubts over the health of the global economy linger.
U.S. retail sales dipped and euro zone industrial output dived
on Wednesday, while the Bank of England said Britain needed a
long period of healing.
Spot silver <XAG=> was at $13.97 an ounce, down 1.6 percent
from its previous finish of $14.19.
The world silver survey compiled by research firm GFMS
showed that global silver fabrication demand in 2008 fell about
1 percent year-on-year to 832.6 million ounces due to a
drop-off in industrial production amid downturn.
[]
However, investment buying in silver, in the form of
exchange-traded funds (ETFs) and silver bullion coins, rose
sharply on the back of gold's rally last year, the report
showed.
Elsewhere, platinum <XPT=> was at $1,116.50 an ounce
against its late Tuesday New York quote of $1,130, while spot
palladium <XPD=> was at $220.50 an ounce, down 5.2 percent from
its previous finish of $232.50.
(Editing by Lisa Shumaker)
