* Gold weakens after US jobless claims raised hopes
* Silver at two-month highs, up 6 pct this week so far
* Coming up: US 2nd-qtr preliminary GDP due Friday
(Recasts, updates prices to market close, adds comments,
double byline/dateline)
By Frank Tang and Amanda Cooper
NEW YORK/LONDON, Aug 26 (Reuters) - Gold slipped on
Thursday, ending a two-day rise, as U.S. jobless claims
declined more than expected, denting bullion's case as a
safe-haven investment.
Silver also pared early gains, but remained on course for a
6 percent rise this month, which would be its strongest monthly
increase since April.
New U.S. jobless claims fell more than expected last week
but were too high to signal a shift in a weak labor market that
is constraining economic growth. []
"The jobless claims data has raised some hopes. There is
reduced risk aversion and less concern about the economy,
because we certainly had some dismal data earlier in the week,"
said Peter Buchanan, senior economist at CIBC World Markets in
Toronto.
Buchanan also cited better German consumer sentiment and
better U.K. retail sales data on Thursday. []
Spot gold <XAU=> was at $1,238 an ounce by 2:20 p.m. EDT
(1820 GMT) from $1,239.00 the day before. Earlier in the
session, it hit a high of $1,244.00, its strongest level since
June 30. U.S. gold futures <GCZ0> settled down $3.60 an ounce
at $1,237.70.
A spate of lackluster U.S. economic indicators, including
the durable-good orders, new and existing home sales data, all
showed signs of a stalling economic recovery, raising fears of
a double-dip recession. (Graphic: http://r.reuters.com/kuv45m)
Gold struck a lifetime high of $1,264.90 in June, partly
driven by worries about a slowdown in the U.S. economy and a
cooling in several major engines of growth, such as China.
"Everybody was optimistic on the economic front back in
midsummer, and hence gold was backing off as people were
putting risk back on the books and unwinding safe-haven
positions," said Simon Weeks, head of precious metals at Scotia
Mocatta.
Disappointing economic data this month that started with a
surprisingly large fall in July job growth has prompted the
Federal Reserve to renew its drive to keep interest rates low,
thereby creating a favorable environment for gold.
Gold's five-percent gain so far in August was also powered
by technical buying, analysts said.
Hans Kashyap, president of California-based Analytics
Research Corp, said that December gold's rise on Tuesday was a
bullish "outside day reversal," confirming a rising trend
starting from late July at $1,160 an ounce. (Graphic:
http://link.reuters.com/syz27n)
Kashyap said the fact that December found support at
$1,210, a technical breakout level going back to Aug 12,
suggested gold's next move would be a test against its highs
set in late June at around $1,250-52.
SILVER OUTPERFORMING GOLD IN AUGUST
Silver rose for a third successive session, bringing the
gain for the week to more than 6 percent, putting it on course
for its largest weekly gain since January. Spot silver <XAG=>
was at $18.94 an ounce against $18.93.
"Much of silver's recent rally is due to expanding investor
interest, as registered by rising CME volumes and
options-related buying - but there's also been a notable
increase in ETF buying," said Edel Tully, UBS precious metals
strategist, in a daily report.
"We are positive towards silver this year, and see
potential for it to gain as the 'poor man's gold', a cheap
alternative to the primary safe-haven asset," she added.
The gold/silver ratio -- the number of ounces of silver
needed to buy one ounce of gold -- fell to its lowest since the
start of the month on Thursday. (Graphic:
http://link.reuters.com/dyd57n)
The platinum group metals were also up on the day. Platinum
<XPT=> was last at $1,530.50 an ounce, compared with $1,527 an
ounce late in New York on Wednesday, while palladium <XPD=> was
up almost 2 percent at $498 an ounce from $492.00.
Prices at 2:42 p.m. EDT (1842 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1237.70 -3.60 -0.3% 12.9%
US silver <SIU0> 18.982 -0.044 0.0% 12.7%
US platinum <PLV0> 1539.90 12.50 0.8% 4.7%
US palladium <PAU0> 502.50 10.95 2.2% 22.9%
Gold <XAU=> 1237.35 -1.65 -0.1% 12.9%
Silver <XAG=> 18.94 0.01 0.1% 12.5%
Platinum <XPT=> 1529.50 2.50 0.2% 4.4%
Palladium <XPD=> 498.50 6.50 1.3% 22.9%
Gold Fix <XAUFIX=> 1237.00 -3.25 -0.3% 12.0%
Silver Fix <XAGFIX=> 19.11 48.00 2.6% 12.5%
Platinum Fix <XPTFIX=> 1531.00 3.00 0.2% 4.4%
Palladium Fix <XPDFIX=> 502.00 1.00 0.2% 24.9%
(Additional reporting by Lewa Pardomuan in Singapore)
