NEW YORK, Aug 26 (Reuters) - COMEX gold and silver rose in thin trade Monday as stock prices fell, with a UK public holiday reducing liquidity and traders reluctant to commit before the coming U.S. Labor Day holiday weekend.
Investors rotated out of blue chips, holding the Dow Jones industrials down 0.8 percent in the afternoon amid profit-taking after last week's test of the 9,000 threshold.
December gold settled $2.70 higher at $311 an ounce, rallying from $307.70 to a one-week high of $312. Estimated volume was an underwhelming 16,000 contracts.
Spot gold rose to $309.45/95 from Friday's close at $306.75/7.25.
There was no fix by the London Bullion Market Association on Monday, with city banks closed.
"Gold's going up on stock market weakness and on XAU strength. I'm not sure why," said a floor broker, referring to the XAU index of gold and silver mining shares, which was up more than 4 percent.
"I'm going to have to think we're going on technical levels, now that we broke above last Tuesday's high," he added.
The trader expressed surprise that strong home sales data failed to rally the dollar and hit gold, which benefited from this year's dollar sell-off and worries about the U.S. economic recovery.
July new home sales rose 6.7 percent to a new record, while existing homes sales were up 4.5 percent, showing the buoyant housing market continues to keep the economy afloat.
Friday's CFTC commitments of traders report showed that big speculators turned net long again by 4,708 gold contracts as of Tuesday. A week ago, they were short 476 contracts, the first such orientation since the start of the 2002 bull run that took prices to 2-1/2 year highs over $330 in June.
"While constructive, we're not sure this is evidence of a definite trading plan to match the 46,914 contract peak accumulation from back on May 21," IFR/Pegasus analyst Timothy Evans wrote in a commentary late Friday. "Gold may have seen its trending move for the year, and now just be subject to short-term chop."
September silver rose 1.5 cents to $4.438 an ounce. It hovered above Friday's six-month low at $4.38, trading $4.455-$4.42. About 11,000 contracts were turned over.
Spot silver was quoted $4.44/46, up from $4.41/43 late Friday.
The net speculative long in silver fell to 16,444 lots from 22,737 lots last week, according to the CFTC figures.
This week should be dominated by rollovers. First notice day for September silver is Friday, by which time most longs who don't want to risk receiving physical metal will have covered positions or switched them to the December contract.
Leonard Kaplan, president of Prospector Asset Management, said in his report Monday that when silver prices where last this low in February, gold was $25 cheaper than it is now.
"The gold/silver ratio is now near or at 70 to 1, historically extremely high. Such a ratio would scream that either silver is just stupid cheap at these prices or that gold will soon fall in value quickly," he wrote. "I greatly favor the first explanation."
NYMEX October platinum rose $3.60 to $549.80 an ounce. Spot platinum was at $547/552.
September palladium gapped up $12.35 to $334.35 an ounce in illiquid trade. Spot last fetched $330.35/342.35.
Dealers said a fund bought in New York, where the thin conditions may have exacerbated the rally.