* Gold boosted as dollar slides to 6-week low vs euro
* Wall St gains, better US earnings stir inflation worries
* Gartman says buys gold on technicals, dollar decline
(Recasts, updates with quotes, closing prices, previous
dateline LONDON)
By Frank Tang
NEW YORK, July 20 (Reuters) - Gold futures rallied above
$950 an ounce on Monday, reaching the highest level in more
than a month, as a sharp dollar decline and better U.S.
corporate earnings boosted bullion's inflation-hedge appeal.
Commodities in general benefited from a sharper appetite
for risk, dealers said, with world stocks rallying as investors
were tempted back into higher-yielding assets.
A brighter outlook for the financial sector amid economic
optimism has underpinned the gold market this week. The metal,
viewed as an inflation hedge, has been weighed down by the
prospect of deflation, or a downward spiral in prices.
"You are starting to see the precious metals taking the
lead on the positive rebound of the better-than-expected
earnings coming out of the U.S. stock market, and the
anticipation of reflation," Frank McGhee, head precious metals
trader at Integrated brokerage Services LLC in Chicago.
U.S. August futures <GCQ9> settled up $11.30, or 1.2
percent, at $948.80 an ounce on the COMEX division of the New
York Mercantile Exchange. The August contract hit a session
peak of $955.40, which marked the loftiest level since June
12.
Spot gold <XAU=> traded at $949.50 an ounce at 2:33 p.m.
EDT (1833 GMT), against $936.50 in its previous session
finish.
Prominent independent investor Dennis Gartman said on
Monday he is now a buyer in the gold market because of
bullion's technical strength and its status as a hedge against
the U.S. dollar. []
The dollar slid to a six-week low against the euro <EUR=>
as rising stock markets boosted appetite for higher-yielding
currencies seen as riskier. []
Other commodities also benefited from stronger risk
appetite, with oil climbing toward $65 a barrel and copper
rising to its highest level since October. [] []
"I's a combination of several factors -- dollar weakness,
the strength of the oil price," said Eugen Weinberg, analyst at
Commerzbank.
Gold priced in euros <XAUEUR=R> rose to a three-week high
of 671.24 euros an ounce, while sterling-priced gold <XAUGBP=R>
reached a peak of 578.78 pounds, its highest since June 11.
"Appetite for commodities (is) coming back with the hope of
an economic recovery," said Alexander Zumpfe, a trader at
precious metals house Heraeus.
MORE RALLY?
Analysts say the euro's break up through $1.42 may fuel
further gains in the gold price.
Bullion, like all dollar-priced commodities, becomes
cheaper for holders of other currencies as the U.S. unit
weakens.
Demand for physical gold, however, remained lackluster,
with the main bullion-backed exchange-traded fund, the SPDR
Gold Trust, reporting a 0.31-tonne outflow on Friday. The fund
said its gold holdings dropped more than 15 tonnes last week.
[]
Among other precious metals, silver <XAG=> tracked gold
higher, rising nearly 2 percent to $13.62 an ounce from $13.39.
Platinum <XPT=> was at $1,182 an ounce against $1,171, while
palladium <XPD=> was at $252 against $246.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 948.80 11.30 1.2 884.30 7.3
US silver <SIN9> 13.620 0.222 1.7 11.295 20.6
US platinum <PLN9> 1184.70 16.10 1.4 941.50 25.8
US palladium <PAU9> 256.00 6.40 2.6 188.70 35.7
Prices at 3:02 p.m. EDT (1902 GMT)
Gold <XAU=> 949.40 12.90 1.4 878.200 8.1
Silver <XAG=> 13.62 0.23 1.7 11.30 20.5
Platinum <XPT=> 1182.00 11.00 0.9 924.50 27.9
Palladium <XPD=> 252.00 6.00 2.4 184.50 36.6
Gold Fix <XAUFIX=> 952.75 15.25 1.6 836.50 13.9
Silver Fix <XAGFIX=> 13.740 0.580 4.4 14.760 -6.9
Platinum Fix <XPTFIX=> 1181.00 0.00 0.0 1529.00 -22.8
Palladium Fix <XPDFIX=> 251.00 0.00 0.0 365.00 -31.2
(Additional reporting by Jan Harvey and Kylie MacLellan in
London)
