(Recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash and Bate Felix
LONDON, March 28 (Reuters) - Gold fell on Friday on weaker
oil prices and a rise in the dollar, while platinum jumped to
its highest in more than a week as speculative buying
accelerated after the metal regained $2,000 an ounce.
Spot gold <XAU=> declined to $940.70 an ounce before rising
to $944.20/945.10 at 1106 GMT, against $951.80/952.60 in New
York late on Thursday and last week's record high of $1,030.80.
"We have come off this morning on the back of a stronger
dollar against the euro, and oil is retreating from yesterday's
highs," said Tom Kendall, metals strategist at Mitsubishi Corp.
"As far as the direction for the day is concerned, there
isn't that kind of conviction in the market to take gold
convincingly back over $950 and that is going to be the case
until we get fully into the new financial year."
Oil prices eased to near $107 a barrel as crude flows
through Iraq's pipeline system were restored after disruption by
a bomb attack a day earlier.
Gold is generally seen as a hedge against oil-led inflation
and often moves in the opposite direction of the dollar.
The dollar rose against the euro and the yen, but analysts
said the recovery was unlikely to last. The euro was on track to
clock its best quarterly performance against the dollar in more
than three years.
The U.S. currency has taken a beating on the view that the
weak U.S. economy will continue to suffer, opening the way for
more aggressive interest rate cuts.
"The sudden price pull-back across the precious metal
complex during March has raised concerns that the bull run in
this sector has drawn to a close. We disagree," said Michael
Lewis, global head of commodities research at Deutsche Bank.
"We believe weakness in the U.S. dollar has not been
exhausted and with U.S. real interest rates expected to move
deeper into negative territory, we are maintaining our bullish
outlook towards gold and silver prices," he said in a report.
U.S. gold futures for April delivery <GCJ8> fell $4.6 an
ounce to $944.20 -- off last week's record of $1,033.90.
PRICE CONSOLIDATION
Investors awaited the release of U.S personal consumption
expenditure price index, a widely-watched gauge of inflation
pressures, due at 1230 GMT, for market direction.
"In the coming sessions, price consolidation above the $940
level is likely to attract fresh willing buyers. However, the
(gold) price rise from here is likely to be slow," said Pradeep
Unni, analyst at Vision Commodities.
"The sharp price drop witnessed last week has baffled many
investors. There could be some further attempts to take profits
ahead of the month and quarter end. A cautious entry into the
market on dips is suggested."
In other metals, spot platinum <XPT=> rose to $2,030/2,050
an ounce from $2,023/2,033 in New York. It struck a record high
of $2,290 on March 4 on supply fears driven by mining
disruptions in top producer South Africa.
Platinum has gained around 50 percent in 2008 after a power
crisis in South Africa forced gold and platinum mines to shut
down for five days in January, driving platinum prices.
But the metal, mainly used in jewellery and auto catalysts
to clean exhaust fumes, tumbled to a 6-week low at $1,805 an
ounce last week on broad-based sell-off in commodities as funds
booked profits from record highs.
Silver <XAG=> eased to $18.37/18.42 from $18.50/18.55 an
ounce -- off a 27-year high of $21.24 hit on March 17. Palladium
<XPD=> dipped to $443/448 an ounce from $445/450.
(Reporting by Atul Prakash; editing by Elizabeth Piper)
