* Gold rallies to 1-month high on record oil
* Dollar holds near 3-week low against euro
* World stocks at 3-month low
(Recasts, adds comment, updates prices, pvs SINGAPORE)
By Raissa Kasolowsky
LONDON, June 27 (Reuters) - Gold rallied to its strongest
level in a month on Friday as record oil prices, a weak dollar
and tumbling world stocks boosted the metal's safe-haven appeal.
Gold <XAU=> climbed to $924.10 an ounce, its highest since
May 27 and was at $922.00/923.00 an ounce by 0935 GMT, well
above $912.60/913.60 an ounce late in New York on Thursday.
World stocks fell to a three-month low as a fast
deteriorating global inflation picture fanned concerns over the
outlook for corporate profits. []
"There seems to be a very clear link between people's
worries over the economic outlook and investment in gold," said
Daniel Smith, an analyst at Standard Chartered.
"The weaker dollar environment has also helped but there
does seem to be a clear link between equities and gold. It's
safe-haven buying."
In theory, rising energy prices boost gold's appeal as a
hedge against inflation, while a weaker dollar makes the metal
an attractive alternative investment.
Despite the gains, gold was still well below a lifetime high
of $1,030.80 an ounce hit in March.
Oil <CLc1> leapt to a new record near $142 a barrel on
Friday, extending gains after surging nearly 4 percent in the
previous session. []
The dollar steadied after sliding in the previous session
but held near three-week lows versus the euro. The U.S. currency
had dropped as investors reduced their expectations for a
Federal Reserve rate hike this year, and as U.S. stocks tumbled.
"After the Fed came in and talked about its inflation
concerns the market now sees the possibility of rate rises as
relatively low and that is really starting to pull on the gold
price which is particularly sensitive to FX and global rates,"
said Daniel Hynes, metals strategist at Merril Lynch.
Investors will closely monitor key U.S. data to find out
more about the health of the economy. U.S. May personal income
and consumption data are due at 1230 GMT and Reuters/University
of Michigan consumer sentiment data for June due at 1355 GMT.
In industry news, the market also kept an eye on the supply
side threats. In Peru, miners are going ahead with a plan to
strike for better benefits starting on Monday. []
Spot platinum <XPT=> rose to $2,065.00/2,080.00 an ounce
from $2,057.50/2,077.50 late in New York. Spot palladium <XPD=>
rose to $466.50/474.00 an ounce from $464.00/472.00 an ounce.
Silver <XAG=> edged up to $17.40/17.46 an ounce from
$17.22/17.28 late in New York.
(Reporting by Raissa Kasolowsky; Editing by Peter Blackburn)
