* Gold climbs as oil rallies, technical resistance breaks
* Talk emerges of producer buy-back
* Platinum rises on reports of Chinese buying
(Recasts, updates prices, market activity to late in New
York, adds second byline, new dateline, previously LONDON)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, July 10 (Reuters) - Gold rallied nearly 2
percent on Thursday, boosted by firmer oil prices, a weaker
dollar and technical buying including automatic orders
triggered as gold ruptured resistance levels, traders said.
Spot gold <XAU=> surged to $944.10/445.30 an ounce by 2:42
p.m. EDT (1842 GMT) from $926.90/928.10 late Wednesday in New
York. The session high was $945.40, its highest in a week.
August futures <GCQ8> finished $13.40, or 1.44 percent,
higher at $942 an ounce on the COMEX division of New York
Mercantile Exchange, touching a session high at $946 an ounce.
Last week, it reached a 2-1/2-month peak at $950 an ounce.
Crude oil, a key driver of gold prices, surged more than
$6, strirred by news of Iran testing missles and worries about
the potential for more militant action in Nigeria. []
Firmer oil prices fuel concerns over rising inflation,
against which gold is often bought as a hedge.
"The jump in oil gave (gold) a bit of help along," said BNP
Paribas metals analyst David Thurtell.
Also, talk of a producer buying back gold it had previously
sold forward boosted prices.
Mitsubishi metals strategist Tom Kendall said the rally
suggested "a large fund move, or a producer hedge buy-back."
"AngloGold Ashanti received shareholder approval of a
rights issue earlier this week," he noted.
"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. The miner on Monday said 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 in May.
The dollar fell against the euro amid credit worries after
shares in major U.S. mortgage finance sources Fannie Mae and
Freddie Mac tumbled on capital concerns. []
Gold traders said stress in financial markets when Fannie
and Freddie stocks declined to lows last seen in 1991 also
caused flight-to-safety buying of precious metals.
Spot silver <XAG=> built on day earlier gains, tracking
gold higher to $18.28/18.33 an ounce by 2:36 p.m. EDT (1836
GMT), from $18.09/18.15 an ounce late Wednesday.
PLATINUM FIRMS
Among other precious metals, spot platinum <XPT=> firmed to
$1,996.50/2,016.50 an ounce in late New York trade from
$1,958.50/1,978.50 on Wednesday.
Reports of stronger buying from China and strength in the
gold price cheered buyers on Thursday, after platinum hit a
two-month low of $1,936.50 earlier this week.
Palladium <XPD=> was up at $446.50/454.50 against
$442.00/450.00 on Wednesday.
(Reporting by Carole Vaporean in New York and Jan Harvey in
London; Editing by David Gregorio)
