* Stock market strength hits safe-haven demand for gold
* Platinum slips on demand fears after Chrysler bankruptcy
* U.S. auto sales plunge near 30-year lows
(Recasts, updates prices, market activity to close, adds
second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, May 1 (Reuters) - Gold ended lower on
Friday as signs of economic recovery dented safe-haven demand,
and platinum group metals sank as U.S. April auto sales tumbled
toward 30-year lows after Chrysler LLC filed for bankruptcy.
"You don't have any momentum players in the market. It is a
market that has no interest at this present moment," said
Jonathan Jossen, a COMEX gold options floor trader.
Spot gold <XAU=> was at $884.85 an ounce at 2:30 p.m. EDT
(1830 GMT), down slightly from $885.50 late Thursday in New
York. U.S. gold futures for June delivery <GCM9> settled down
$3.00 at $888.20 an ounce on the COMEX division of the New York
Mercantile Exchange.
Trading was thin, with many markets shut for the Labor Day
holiday and ahead of the U.K. May Bank Day holiday on Monday.
Increased appetite for risk is weighing on gold, analysts
said. The S&P 500, a broad U.S. stock index, in April posted
its best month in nine years.
"As stock markets extend their gains, funds are likely to
get further diverted away from bullions into the equities,"
said Pradeep Unni, an analyst at Richcomm Global Services.
Risk sentiment also improved in currency markets, where the
dollar and yen fell as stronger-than-expected U.S. data pared
demand for both currencies as a refuge against global slowdown.
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Gold typically moves opposite to the dollar, often bought
as an alternative to the U.S. currency. But the dollar and gold
recently have tracked each other, reacting to risk aversion.
Floor trader Jossen said weak technical charts of gold
futures could prompt investors to sell into rallies.
Jossen said COMEX June futures must rise above key
resistance at $919 an ounce, and buyers should emerge if prices
fell toward the $825-850 range.
Spot silver <XAG=> was at $12.46 an ounce, up 1 percent
from its previous finish of $12.34.
PLATINUM DROPS AS U.S. AUTO SALES TUMBLE
Platinum <XPT=> was at $1,086.50 an ounce, down 1.1 percent
from its late Thursday quote of $1,098, while palladium <XPD=>
was at $213.00 an ounce, down 0.9 percent from its previous
finish of $215.
Platinum and palladium are used to clean exhaust fumes from
vehicles, and reports showed U.S. auto sales appeared headed
for their lowest levels in nearly 30 years. []
A day earlier, Chrysler LLC filed for bankruptcy.
"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.
But 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 sees palladium at $220 an ounce in one month, up from
$200 previously, and at $230 in three months, against $210.
ETF Securities, operator of 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.
[]
(Reporting by Frank Tang and Jan Harvey)
