* Gold climbs as oil prices rise
* Investors eye crude prices ahead of Saudi meeting
* Dollar weighed by tough ECB talk on inflation
(Recasts, adds fresh comment/detail)
By Jan Harvey
LONDON, June 20 (Reuters) - Gold rose on Friday as a
recovery in crude oil prices and tough anti-inflation comments
from the European Central Bank dragged the dollar down against
the euro.
Traders were also watching the crude market ahead of a
weekend meeting of oil producers and consumers in Saudi Arabia,
with any new strength in oil prices likely to push gold higher.
Spot gold <XAU=> was trading at $904.45/905.65 an ounce at
1505 GMT from $902.95/904.35 an ounce late in New York on
Thursday, when it jumped as high as $907.90 an ounce, its
strongest level in more than a week.
The metal eased earlier on Friday as investors took profits
after Thursday's price rally failed to take gold through its
previous high of $908.70, hit on June 9.
"From a technical point of view, we have failed to go above
the high we saw last week," said Wolfgang Wrzesniok-Rossbach,
head of sales at precious metals trading group Heraeus.
"That would have been a bullish signal to the market that
would have attracted some speculators, as there is not a lot of
resistance from there to $935 an ounce," he added.
Crude oil <CLc1> rose by more than $4 a barrel on a view now
gaining ground that a fuel price increase by China may actually
boost rather than curb demand for fuel in the world's
second-largest oil consumer. []
Oil fell nearly $5 a barrel on Thursday after China raised
pump gasoline and diesel prices by up to 18 percent.
Higher oil prices weighed on the dollar, which also came
under pressure on talk of higher euro zone interest rates by ECB
Executive Board member Lorenzo Bini Smaghi in a column for the
Financial Times. []
Dollar sentiment has also been hit by a a raft of poor data,
which has raised concerns over the health of the U.S. economy.
"(Gold) prices are holding firm partly in response to
speculation that the U.S. Fed could delay increasing interest
rates," said Fairfax analyst Marc Elliott.
The precious metal tends to move in the opposite direction
to the U.S. currency, as it is often bought as a hedge against
dollar weakness.
Meanwhile the Swiss National Bank (SNB) said on Friday its
gold holdings fell by 368,000 ounces month-on-month to 35.02
million ounces at the end of May.
Among other precious metals, spot platinum <XPT=> rose to
$2,055/2,075 an ounce from $2,036.50/2,056.50 on Thursday.
Palladium <XPD=> was at $470/480 an ounce from
$469.00/477.00 and silver was at $17.45/17.52 an ounce from
$17.39/17.44.
(Additional reporting by Pratima Desai)
(Reporting by Jan Harvey; editing by David Evans)
