* SPDR Gold ETF holdings rise, first time in a month
* Initial Wall St. weakness, lower dollar boost gold
* HSBC ups 2009 gold view to $875 from $825 on inflation
(Recasts, updates with quotes, closing prices, adds NEW YORK
dateline/byline)
By Frank Tang and Humeyra Pamuk
NEW YORK/LONDON, May 14 (Reuters) - Gold prices turned
higher after a mixed session on Thursday, helped by investor
demand for portfolio protection against inflation as well as a
weaker U.S. dollar.
"There is a core of buying that comes into the gold market
which is based on worries of higher inflation, and that has
been a steady factor for several months now," said James Steel,
chief commodities analyst at HSBC.
Spot gold <XAU=> traded at $927.65 an ounce at 2:39 p.m.
EDT (1839 GMT), up 0.2 percent from its quote of $925.45 in New
York late Wednesday, when it touched a six-week high on buying
by gold-backed exchange-traded funds.
U.S. gold futures for June delivery <GCM9> settled up $2.50
at $928.40 an ounce on the COMEX division of the New York
Mercantile Exchange.
HSCB raised its 2009 gold price forecast to $875 from $825
an ounce as inflation concerns spur strong investment demand
for gold exchange-traded funds and bullion coins and bars.
[]
Gold was also supported by a weaker dollar, with
worse-than-expected U.S. economic data and initial weakness in
stock markets fueling doubts that a recent winning streak was
sustainable.
Higher-than-expected U.S. jobless claims and producer
prices data helped precious metals erase larger losses from
earlier in the day. []
"The jobs data is worse than forecast," said James Moore,
an analyst at The Bullion Desk.com. "It's a bit of a reality
check that maybe the recession in the U.S. is going to take
longer to crawl out of and the markets have got a little bit
ahead of themselves."
This followed a fall in U.S. retail sales data on
Wednesday, which dented sentiment that had boosted equity and
commodity markets and signaled the economy's troubles were far
from over.
Wall Street turned more than 1 percent higher following
Wednesday's steep decline. Losses on the equity markets have
benefited gold in recent months, as investors buy bullion as a
haven from risk in other markets.
"We think equity markets have overcooked the upturn," said
Michael Lewis, global head of commodities research at Deutsche
Bank.
INFLATION SUPPORTS
With the world economy not out of the woods yet, analysts
saw higher price prospects for gold.
"We're bullish for the next couple of months. We feel that
these reflationary trades ... are now going to be under attack
and those sorts of environments do tend to see flows into gold
ETFs," Lewis said, referring to recent gains in copper and oil
prices.
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust <GLD>, earlier said its holdings had risen to
1,105.62 tonnes as of May 13, up 1.53 tonnes from the previous
business day for the first gain in a month. []
Platinum <XPT=> was at $1,110.50 an ounce, down from its
late Wednesday quote of $1,111.00, while silver <XAG=> was at
$14.04 an ounce, up 0.7 percent from its previous finish of
$13.94, and palladium <XPD=> was at $223.00 an ounce, up 1.1
percent from its previous close of $220.50.
(Additional reporting by Pratima Desai, Michael Taylor,
Maytaal Angel; Editing by Walter Bagley)
