CORRECTED - U.S. gold, silver rally on oil gains, weak dollar

(Corrects paragraph 7 to read U.S. fourth-quarter gross
domestic product was unrevised but weaker than forecasts)

NEW YORK, Feb 28 (Reuters) - New York gold futures jumped
to a record high Thursday on the back of a lower dollar and
rising crude oil prices, and dealers said possible further
weakness of the U.S. currency and speculation of further rate
cuts should continue to fan investor buying of gold.

Jonathan Jossen, independent floor trader in New York, said
that with time, gold contracts would trade higher as the dollar
slumped against the euro.

"I would think that we are going to test $976. Volume is
quiet right now, but it has picked up a bit from overnight.
Options are quiet, too," Jossen said.

At 11:12 a.m. EST (1612 GMT), the benchmark April gold
contract at the COMEX division of the New York Mercantile
Exchange GCJ8 rose $7.00 to $968.00, trading between $955.50
and $969.30, an all-time high.

The dollar fell to a record low versus the euro EUR= as
weak U.S. economic data fueled recession fears and raised
expectations that Federal Reserve Chairman Ben Bernanke will
cut interest rates again.

Returns on U.S. holdings are eroding for foreign investors
and many see precious metals as hard assets that can protect
portfolios.

U.S. fourth-quarter gross domestic product was unrevised
but weaker than forecasts, and a jump in initial weekly jobless
claims added to concern about the economy and increased the
likelihood of rate cuts.

George Gero, vice president of RBC Capital Markets Global
Futures, said that the dollar's weakness and supply tightness
due to mining problems in South Africa and South America kept
traders from selling.

"Current prices reflect that hard asset allocations are
increasing in general, and that extended to all major
commodities," Gero said.

Spot gold XAU= in New York was quoted at $965.30/966.10,
up from $957.50/958.30 at the close on Wednesday. London
bullion dealers fixed the afternoon spot price at $959.75.

In investment news, Deutsche Bank said on Thursday it will
launch three exchange-traded notes (ETNs) offering short, long
and leveraged trading strategies in gold, underscoring growing
investment interest as bullion races to record highs.
[ID:nN27483880]

Silver rose toward the $20 mark on Thursday. Silver, which
is also used as an industrial metal, should receive a boost
from the stimulative monetary and fiscal policies by the Fed to
boost an ailing economy, dealers said.

The last time silver traded at these prices was in November
1980, when the bubble created by the Hunt Brothers of Texas
cornering the silver market in the 1970s was deflating.

COMEX May silver SIK8 was up 51.20 cents, or 2.7 percent,
to $19.845 an ounce, trading from $19.165 to $19.925, which
marked a contract peak.

Spot silver XAG= fetched $19.73/19.78, up from the close
at $19.22/27. London silver was fixed at $19.24.

In addition, the first notice day of the March silver
contract is Friday. Volatility usually increases around first
notice day as traders decide whether to roll their March
contracts to the active May futures.

NYMEX platinum was cooling from its rally to a record high
at $2,214 an ounce last week.

A power crisis in top producer South Africa has hampered
mine operations and the expectation of a huge market deficit is
expected to continue to support the white metal.

The active NYMEX platinum contract for April delivery
PLJ8 was down $11.30 to $2,141.00 an ounce. Spot platinum
XPT= fetched $2,127/2,137.

The NYMEX June palladium contract PAM8 rose $6.90, or 1.2
percent, to $567.65 an ounce. Spot palladium XPD= fetched
$557.00/562.00.
(Reporting by Frank Tang; Editing by Marguerita Choy)