* Dollar gains as oil prices resume slide
* Precious metals give up early gains
(Adds trader comment, updates prices)
By A. Ananthalakshmi
SINGAPORE, April 20 (Reuters) - Silver rallied to an
11-month high on Wednesday, lifting gold and other precious
metals with it on optimism over the Chinese economy, but the
metals later pared gains as the dollar regained ground.
Silver and platinum group metals, which see more industrial
demand than gold, have been buoyed by recent upbeat data from
China, where a surge of new debt appeared to be fueling a
recovery in factory activity, investment and household spending.
Spot silver XAG= climbed to $17.23 an ounce, its highest
since May 2015, following a 4.4-percent jump on Tuesday, but
later steadied at $16.95.
Platinum XPT= reached a six-month peak of $1,019.90, while
palladium XPD= hit a fresh one-month peak of $588.05, before
giving up gains later in the session.
"We still remain cautious, particularly on silver given that
gross longs on COMEX sit at a staggering 98 percent of their all
time highs, with net positioning at 79 percent of the all-time
high," said MKS Group trader Alex Thorndike.
"This screams of a rally that could run out of puff all too
quickly, and experience a short and sharp capitulation."
The most traded silver contract on the Shanghai Gold
Exchange XAGTD=SGEX rose for a tenth session out of 11,
climbing about 3 percent on Wednesday.
Assets in silver-backed exchange traded funds are near their
highest since 2014, supporting the price rally. The six silver
ETFs tracked by Reuters have seen inflows of nearly 30 million
ounces since the beginning of the year. HLDTOTALL=XAG
Meanwhile, gold XAU= dipped 0.1 percent to $1,253.10 an
ounce by 0713 GMT after gaining earlier in the day.
U.S. dollar regained some ground against commodity
currencies such as the Australian dollar as oil prices slid. The
greenback rose 0.2 percent against a basket of currencies.
Crude futures fell after Kuwaiti oil workers ended a
three-day strike that had cut the nation's crude output by
around half, with worries about an oversupplied market returning
to the fore. O/R
"Gold is looking good now as there is uncertainty over oil
prices and equities. But there is big resistance at $1,260,"
said a trader in Hong Kong.
Holdings in SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, slid 7.43 tonnes to 805.03
tonnes on Tuesday, the biggest drop in a month. Persistent
outflows could undermine the price rally.
PRICES AT 0713 GMT
Metal Last Change Pct chg
Spot gold 1248.58 -1.52 -0.12
Spot silver 16.952 0.017 0.1
Spot platinum 1005.15 -6.61 -0.65
Spot palladium 580.3 -0.2 -0.03
Comex gold 1250.8 -3.5 -0.28
Comex silver 16.975 0.003 0.02
COMEX gold and silver contracts show the most
active months