* Gold rides up as risk appetite pressures dollar
* Crude rallies to $72 per barrel; euro stronger
* Inflation-hedge appeal supports gold above $940
By Nick Vinocur
LONDON, June 30 (Reuters) - Gold rose above $940 per ounce
on Tuesday, helped by a weaker dollar as warming investor
attitudes towards riskier assets pushed global equities higher
and raised the price of oil.
Crude <CLc1> was holding near $72 a barrel after rising 2
percent in high-volume Asian trade, brightening the appeal of
gold as a potential hedge against oil-induced inflation. []
Global stocks also gained, with half-year investment plays
partly to thank for the cross-asset rally, while data showing a
stronger than expected improvement in European economic
sentiment helped to support the euro <EUR=> against the dollar.
[]
Spot gold <XAU=> was at $941.00 per ounce at 1237 GMT, up
from $937.05 quoted late in New York trade. The price earlier
hit a high of $944.70 and has found support around $940.
"The focus is turning to fears of inflation rather than fears
of deeper recession," said Matthew Turner, an analyst at VM
Group.
"But there are no immediate signs of inflation anywhere for
now, so investors are looking to the long term, and of course
when inflation does start to go up, the price of gold will be
rising well ahead of it."
UPSIDE CAPPED FOR NOW
Analysts said gold's upside could well face resistance if
risk appetite kept pro-risk markets, like stocks, in buoyant
mode.
"If we see improving macro data -- especially U.S. non-farm
payrolls -- obviously you will have equities rallying, and when
equities rally there is little point in holding gold," he said.
"You will have to see significant dollar pullback and
full-blown inflation to get the thrust we need to retest above
$1,000 -- and we are still in a deflationary phase," he added.
U.S. gold futures for August delivery <GCQ9> rose to $942.20
per ounce, up 0.1 percent from the previous settlement on the
COMEX division of the New York Mercantile Exchange.
Gold was on track to lose almost 4 percent this month, but
was poised for a gain of about 7 percent for the first half of
the year.
On the investment front, the world's largest gold-backed
exchange-traded fund, the SPDR Gold Trust, said its holdings
remained at 1,125.74 tonnes as of June 29, unchanged since June
25. The holdings were down 0.7 percent from a record high marked
in early June. []
Other precious metals were also stronger, with spot silver
<XAG=> rising to $14.01 against $13.84 quoted late in New York,
platinum gaining to $1,195.50 against $1,182.00 previously, and
palladium <XPD=> moving up to $249.50 from $247.00.
(Reporting by Nick Vinocur, additional reporting by Risa
Maeda; Editing by Veronica Brown)
