* Dollar slides to 5-month low vs basket of currencies
* Oil firm near 6-month high above $61l
* Silver hits nine-month high, tracking gains in gold
(Updates prices)
By Jan Harvey
LONDON, May 22 (Reuters) - Gold held near two-month highs
above $950 an ounce in Europe on Friday, consolidating after the
previous session's near 2 percent rise, as investors bought the
metal as a hedge against the weak dollar and financial risk.
Prices have hit tough resistance at $955 an ounce, but
remain well positioned for a fresh push higher if dollar
weakness persists, analysts said.
Spot gold <XAU=> was bid at $954.10 an ounce at 1116 GMT,
against $953.40 an ounce late in New York on Thursday. That
session it reached a peak of $955.95, its firmest since March.
"The dollar is threatening to break through the $1.40 level
on the euro, and there are concerns about the economic
environment," said Calyon metals analyst Robin Bhar. Both boost
buying of bullion, he said. []
Asian stocks slipped and the dollar fell to a 2009 low as
speculation grew that the United States could lose its triple-A
rating. Fears over the economic outlook and the health of the
financial system fuelled interest in gold as a haven.
[]
Ratings agency Standard & Poor's cut its outlook on Great
Britain to negative from stable on Thursday, while Moody's
Investor Services said it was comfortable with its U.S. rating
but that it was not guaranteed forever. []
Bullion was also technically well-positioned to make further
gains, Bhar added, especially if the dollar softens further.
"We have closed for two days above the $935 level, so the
technical guys will be saying we now have confirmation of a
successful upside break," he said.
"We've seen in the past gold has put in some false starts
and never really achieved a clean break-out. If we close at
these sorts of levels, it will look really good on the weekly
charts, and provide even more upside potential."
Stronger oil prices, which hovered around their six-month
peak, also supported gold. Bullion can be bought as a hedge
against oil-led inflation, while rising crude prices can also
boost interest in commodities as an asset class. []
LACKLUSTRE
Investor interest in gold-backed exchange-traded funds
remained relatively lacklustre. Holdings of the largest
gold-backed ETF, the SPDR Gold Trust <GLD>, were unchanged for a
sixth consecutive session on Thursday.
London's ETF Securities noted an outflow from their Physical
Gold ETF <PHAG.L>. Its holdings declined nearly 69,000 ounces or
2.5 percent on Thursday.
Among other precious metals, platinum <XPT=> was quoted at
$1,149.50 an ounce against $1,148.50 late on Thursday, while
palladium <XPD=> was at $231.50 an ounce against $231.
Fellow platinum group metal rhodium dipped $50 to $1,400 an
ounce, giving up some of this week's earlier gains.
Spot silver <XAG=> was bid at $14.59 an ounce against
$14.51. The metal tracked gains in gold to a nine-month high of
$14.69 earlier on Friday, and was up around 5.5 percent on the
week at present.
"We expect the metal to continue to benefit from inflation
fears and investor diversification, and think silver is brewing
for an upside push of its own, potentially targeting the $16.40
level," said TheBullionDesk.com analyst James Moore in a note.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
