* Gold climbs as oil ticks up on Brazil strike
* Talk emerges of producer buy-back
* Platinum rises on reports of Chinese buying
(Updates throughout)
By Jan Harvey
LONDON, July 10 (Reuters) - Gold rallied nearly 2 percent on
Thursday, boosted by firmer oil prices and talk of a producer
buying back material it had previously sold forward.
Gold <XAU=> rose to $939.25/940.25 at 1537 GMT from
$926.90/928.10 an ounce late in New York on Wednesday.
Earlier the metal touched a session high of $944.30, its
firmest level in a week.
Oil, one of the main external drivers of gold prices, ticked
up after workers at Brazil's state oil company Petrobras said
they would begin a five-day strike next week.
"The jump in oil gave (gold) a bit of help along," said BNP
Paribas metals analyst David Thurtell.
Firmer oil prices typically benefit the precious metal, as
they fuel concerns over rising inflation, against which gold is
often bought as a hedge, and boost interest in commodities as a
whole. []
Mitsubishi metals strategist Tom Kendall said the size of
the move amid a dearth of fresh news suggested "a large fund
move, or a producer hedge buy-back".
"AngloGold Ashanti received shareholder approval of a rights
issue earlier this week," he said.
"One of the main reasons for the rights issue was to fund
restructuring of their gold hedges."
Hedging allows gold miners to sell their product forward at
a fixed price.
When producers expect prices to rise above the contract
price, they buy back those contracts or de-hedge, creating a
source of demand. Rising gold prices have prompted a spate of
de-hedging in recent years.
AngloGold Ashanti declined to comment on its hedge position
when contacted by Reuters.
The miner said on Monday it had completed its planned rights
offer to raise R11.9 billion, which it said in May it planned to
use to cut its gold hedging position.
The world's third biggest gold producer had some 9.25
million ounces of gold ounces in May this year.
PLATINUM FIRMS
The dollar, usually the main driver of gold, which is often
bought as a currency hedge, was steady after firming earlier in
the session. []
Spot silver <XAG=> tracked gold higher to $18.24/18.29 from
$18.09/18.15.
Among other precious metals, spot platinum <XPT=> firmed to
$1,987.00/2,007.00 an ounce from $1,958.50/1,978.50 late in New
York. It hit a two-month low of $1,936.50 on Tuesday on fears a
slowing U.S. economy could weaken demand from car makers.
However, reports of stronger buying from China and strength
in the gold price has cheered buyers on Thursday.
"Since the start of the month and as the platinum price
fell, strong Chinese demand has returned," said UBS analyst John
Reade in a note.
"In the past five days Shanghai turnover of platinum
exceeded what traded in the entire month of either May or June.
This is reassuring for our view that platinum remains the most
fundamentally attractive of the liquid precious metals."
Palladium <XPD=> was up at $446.50/454.50 against
$442.00/450.00 on Wednesday.
(Reporting by Jan Harvey; Editing by David Evans)
