* Euro firms to $1.40 for first time since January
* Oil firm near 6-month high above $61
* Silver hits nine-month high, tracking gains in gold
(Updates with closing prices, quotes, adds NEW YORK to
dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, May 22 (Reuters) - Gold climbed to a
two-month high on Friday, breaching $960 an ounce for the first
time since late March as the dollar's slide boosted buying of
the metal as a currency hedge.
Silver prices posted the biggest percentage gains among
precious metals, however, climbing to a nine-month peak of
$14.83 as investors turned to the metal as a cheaper
alternative to gold.
Spot gold <XAU=> touched a high of $961.30 an ounce, the
loftiest price since March 20. It was at $956.95 an ounce at
2:32 p.m. EDT (1832 GMT), up 0.4 percent from its late Thursday
quote in New York at $953.40 an ounce.
U.S. gold futures for June delivery <GCM9> settled up $7.70
at $958.90 an ounce on the COMEX division of the New York
Mercantile Exchange.
Simon Weeks, director of precious metals at the Bank of
Nova Scotia, said the majority of gold's gains were dollar
related, with investors "buying hard assets as opposed to hard
currency."
"Physical (buying) has been OK, but I expect a big increase
in the open interest on the long side on the COMEX," he added.
Exchange data showed that COMEX gold open interest rose
sharply for a second straight day as of May 21, closing in on
400,000 lots. []
The dollar continued its slide on Friday, with the euro
trading above $1.40 for the first time since early January, as
fears over U.S. sovereign ratings accelerated a drive away from
the unit. []
Ratings agency Moody's Investor Services said on Thursday
it was comfortable with its U.S. rating of AAA but that it was
not guaranteed forever, while Standard & Poor's cut its outlook
on Great Britain to negative from stable. []
Bullion is also technically well positioned to make further
gains, according to analysts.
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. []
OUTFLOWS
Investor interest in gold-backed exchange-traded funds
remained relatively lackluster, however. 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, silver <XAG=> jumped to a
fresh nine-month high on Friday, also benefiting from dollar
weakness. The metal has risen more than 5 percent so far this
week. Spot silver was at $14.67 an ounce, up 1.1 percent from
its previous finish of $14.51.
Strong ETF buying has been a key factor boosting silver
prices in recent weeks. ETF Securities' silver <PHAG.L>
holdings were at a record 19.462 million ounces on Thursday.
Platinum <XPT=> at $1,152.00 an ounce, up 0.3 percent from
its late Thursday quote of $1,148.50, while palladium <XPD=>
was at $231.00 an ounce, essentially unchanged from its
previous finish.
(Editing by Christian Wiessner)
