* Platinum, palladium slip 2 pct after Chrysler Chapter 11
* European, Asian markets thinned by May Day holidays
(Updates prices, adds comment)
By Jan Harvey
LONDON, May 1 (Reuters) - Gold dipped on Friday as a
recovery in risk appetite, reflected in a firmer tone to global
stocks, dented interest in the metal as a haven, although the
metal pared its losses as U.S. equities edged lower.
Trading is thin due to May Day holidays across Europe and
Asia, traders said.
Spot gold <XAU=> was bid at $884.40 an ounce at 1505 GMT,
against $885.50 an ounce late in New York on Thursday. U.S. gold
futures for June delivery <GCM9> on the COMEX division of the
New York Mercantile Exchange fell $5.70 to $885.50 an ounce.
While the metal has lifted off lows as U.S. equities
weakened, increased appetite for risk is weighing on prices.
"Technically charts looks quite weak and the selling
momentum would gather pace as gold pierces through the $880
-$878 support," said Pradeep Unni, an analyst at Richcomm Global
Services.
"As stock markets extend their gains, funds are likely to
get further diverted away from bullions into the equities."
U.S. stocks slid on Friday as data showed the manufacturing
sector contracted, which overshadowed a stronger-than-expected
consumer confidence reading. []
However, global stocks are still near 3-1/2 month highs,
having risen 11 percent last month. []
Fresh risk appetite could also be seen on the currency
markets, where the dollar rose to a two-week high against the
yen but weakened against perceived higher-risk currencies as
investors bet the worst is over for the economy. []
Gold typically moves in the opposite direction to the
dollar, as it is often bought as an alternative to the U.S.
currency. However, they have recently been moving together as
both react to risk aversion.
PROTECTION
Elsewhere, U.S. April vehicle sales data due later in the
session is being watched by platinum and palladium traders.
The metals both fell more than 2 percent on Friday and are
down 8 percent and 9 percent respectively this week, pressured
by fears over the outlook for the car industry after Chrysler
sought Chapter 11 bankruptcy protection on Thursday. []
Carmakers account for over half of global consumption.
"Yesterday's announcement from the White House that Chrysler
will seek bankruptcy protection brings the auto sector closer to
an endgame," said Swiss bank UBS in a note.
"We suspect that concerns over this... is one of the reasons
why the platinum price has underperformed gold over the past two
weeks," it added.
However, UBS lifted its short-term platinum price forecasts,
citing strong Chinese demand. It now sees platinum at $1,175 an
ounce on a one-month basis against $1,100 previously, and at
$1,275 an ounce over three months from $1,150.
It now sees palladium at $220 an ounce in one month, up from
$200 previously, and at $230 in three months, against $210.
Elsewhere ETF Securities, which operates Europe's largest
platinum-backed exchange-traded fund, said its Physical Platinum
fund <PHPT.L> saw an outflow of 16,600 ounces on Thursday,
equivalent to 5 percent of its total holdings. []
Platinum <XPT=> was bid at $1,074 an ounce against $1,098,
while palladium <XPD=> was bid at $210.50 an ounce against $215.
Spot silver <XAG=> was at $12.41 an ounce against $12.34.
(Reporting by Jan Harvey; Editing by Anthony Barker)
