* Dollar slides to 6-week low vs euro, currency basket
* Firmer equity markets boost appetite for risk
(Adds comment, updates prices)
By Jan Harvey
LONDON, July 20 (Reuters) - Gold rose nearly 2 percent on
Monday as oil climbed and the dollar hit a six-week low against
the euro, boosting bullion's appeal as a currency hedge.
Commodities in general benefited from a sharper appetite for
risk, dealers said, with world stocks rallying as investors were
tempted back into higher-yielding assets.
Spot gold <XAU=> rose to a five-week high of $954.30, its
firmest since June 12, and was bid at $952.80 an ounce at 1322
GMT, against $936.50 an ounce late in New York on Friday.
"It's a combination of several factors -- dollar weakness,
the strength of the oil price, and also the psychological mark
of $950," said Eugen Weinberg, analyst at Commerzbank.
"If you look at what's driving the gold prices there are not
so many fundamental reasons behind the move, it is more
technical," he added.
"You cannot rule out that the market will go even higher if
the oil price stays strong and the dollar stays weak."
Gold priced in euros <XAUEUR=R> rose to a three-week high of
671.24 euros an ounce, while sterling-priced gold <XAUGBP=R>
reached a peak of 577.65 pounds, its highest since June 18.
U.S. gold futures for August delivery <GCQ9> on the COMEX
division of the New York Mercantile Exchange rose $15.70 to
$953.20 an ounce.
The dollar slid to a six-week low against the euro <EUR=> as
rising stock markets boosted appetite for higher-yielding
currencies seen as riskier. []
Other commodities also benefited from stronger risk
appetite, with oil climbing nearly $1 a barrel and copper rising
to its highest level since October. [] []
"Appetite for commodities (is) coming back with the hope of
an economic recovery," said Alexander Zumpfe, a trader at
precious metals house Heraeus.
World stocks rose on better-than-expected corporate earnings
reports and a last-minute rescue package for U.S. lender CIT
Group <CIT.N>, with Asian equities hitting a 10-month peak.
European shares rose for a sixth straight session, while
U.S. stock index futures also climbed. [] []
BREAK HIGHER
Analysts say the euro's break up through $1.42 may fuel
further gains in the gold price.
Bullion, like all dollar-priced commodities, becomes cheaper
for holders of other currencies as the U.S. unit weakens.
Demand for physical gold remained lacklustre, with the main
bullion-backed exchange-traded fund, the SPDR Gold Trust,
reporting a 0.31-tonne outflow on Friday. The fund said its gold
holdings dropped more than 15 tonnes last week. []
Jewellery demand in India was also soft, pressured by the
seasonal summer lull. []
On the supply side, Peter Hambro Mining <POG.L>, the
Russia-focused FTSE 250 gold miner, said its gold output jumped
54 percent in the first half and added second-half production
would be boosted by its Pioneer deposit. []
Among other precious metals, silver <XAG=> tracked gold
higher, rising more than 2 percent to $13.69 an ounce from
$13.39. Platinum <XPT=> was at $1,182 an ounce against $1,171,
while palladium <XPD=> was at $250.50 against $246.
Impala Platinum Holdings <IMPJ.J> said it had suspended
operations at 14 Shaft at its Rustenberg mine in South Africa
after a fatal accident at the facility. Two workers were
confirmed dead and 14 unaccounted for. []
(Additional reporting by Kylie Maclellan; editing by James
Jukwey)
