*Gold above $900 as oil uptick sends prices higher
*Uncertainty, rising inflation benefit gold
*Platinum edges lower after Wednesday's rally
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, June 19 (Reuters) - Gold climbed back
through $900 an ounce on Wednesday to a 10-day high as an
initial pick-up in oil prices, which sparked buying of gold as
an inflation hedge, sent the precious metal through key
technical levels.
Gold <XAU=> reached a peak of $907.90, its highest since
June 9, before easing with oil to trade at $902.95/904.35 by
New York's last quote at 2:15 p.m., against $890.75/891.95 late
in New York on Wednesday.
"(Gold) has been threatening this for the last few days,"
said Simon Weeks, director of precious metals trading at Scotia
Capital.
"Gold is starting to find its feet, given the global
(inflationary) environment we are in, and given what we have
seen coming out in terms of U.S. data releases," he added.
"General sentiment is good."
The metal shrugged off a firmer U.S. dollar on Thursday, as
other factors took over. A brief move higher in oil prices
based on a report of attacks in top supplier Nigeria was enough
to start the precious metal's rally on Wednesday.
However, U.S. crude futures <CLc1> settled down $4.75 at
$131.93 a barrel on news that China will raise retail gasoline
and diesel prices, hampering global energy demand. []
Frank McGhee, head precious metals trader of Integrated
Brokerage Services in Chicago, said that oil's early strength
was enough to trigger heavy buy-stops in gold futures, which
propelled prices sharply higher.
A COMEX floor trader also cited pent-up demand after gold's
recent price weakness for Thursday's rally.
The U.S. gold contract for August delivery <GCQ8> on the
COMEX division of New York Mercantile Exchange settled up
$10.70, or 1.2 percent, at $904.20 an ounce.
Rising fears over inflation on both sides of the Atlantic
and uncertainty over the outlook for currency and equity
markets are boosting gold, which is a popular safe haven for
funds.
The metal has historically benefited from economic turmoil,
and the threat of recession hanging over the United States in
the past year. Concerns over the health of equity markets have
also firmly underpinned the metal.
Gold reached an all-time high of $1,030.80 in March as the
weak dollar, rising oil prices and concerns over the economic
outlook spurred buying.
The technical picture is looking good for gold, analysts
said, with another close above $888 seen as giving the precious
metal a solid floor for an upward move.
POWER WOES PLAGUE SOUTH AFRICA
Platinum prices ended lower as traders took profits after
the white metal climbed 1.5 percent on Wednesday.
The metal rallied after a South African official warned the
country could face a "very severe energy crisis" if state power
utility Eskom failed to raise sufficient funds to bankroll
development.
Johannesberg-based Standard Bank analyst Walter de Wet said
that while higher power tariffs are likely to be absorbed by
producers and should not have much impact on price, any sign
that mines will receive less power could boost the market.
"While cost-wise, electricity might have a small effect,
production-wise it is essential," he said. "In this regard,
mines have committed to cutting electricity consumption,
irrespective of Eskom's power-rationing measures."
Spot platinum <XPT=> was down at $2,036.50/2,056.50 an
ounce from its late New York quote of $2,080.50/2,100.50 on
Wednesday. It rallied to $2,103.50 an ounce in the last
session, its highest since May 28.
Spot palladium <XPD=> was last at $468.50/476.50 an ounce
from $466.00/474.00 last in the U.S. market on Wednesday.
Silver <XAG=> was at $17.36/17.42 an ounce from its previous
finish of $17.33/17.43.
(Editing by Christian Wiessner)
