(Recast, updates prices)
By Lewa Pardomuan
LONDON, May 15 (Reuters) - Gold jumped more than 2 percent
on Thursday as investor buying picked up while oil surged and
the dollar weakened against the euro, boosting the metal's
appeal as an alternative investment and as an inflation hedge.
Gold's gains pushed up other precious metals, with platinum
rising more than 2 percent. Silver and palladium also advanced.
Spot gold <XAU=> hit a high of $887.50 an ounce, up from
$865.05/866.25 an ounce in late New York on Wednesday when it
touched a one-week low of $859.30 on a firmer U.S. dollar.
"The market seems to have ended it consolidation phase after
sustaining above the $860 level," said Pradeep Unni, analyst at
Vision Commodities Services in Dubai.
"Although further gains would be needed to erase the bearish
tone, selling seems to have momentarily ended. As long as $860
holds, the bulls are safe."
But gold was still more than $100 away from a record high of
$1,030.80 an ounce hit on March 17, and dealers expected
jewellery makers to take advantage of lower prices to stock up
again.
"This is a perfect opportunity for them to be restocking
because the gold price could very easily get back above the $900
territory, and gold can do that in a very short space of time,"
said Nick Moore, metals analyst at ABN AMRO.
"I think the high gold price clearly had very significant
impact on jewellery off-take. I think the direction, looking
ahead, will be driven partly by what's happening with oil."
Oil <CLc1> gained to trade above $125 a barrel on Thursday,
boosted partly by weakness in the dollar against the euro
[]
The euro firmed to $1.5504 <EUR=> after strong euro zone
growth in the first quarter. The dollar was also undermined by
data showing a rise in U.S. weekly jobless claims and a net
outflow of capital in March.
The most active June gold futures contract <GCM8> on the
COMEX division of the New York Mercantile Exchange rose $14.7,
or 1.7 percent, to $881.2 an ounce.
Spot platinum <XPT=> hit a low of $1,988.50 an ounce but
then jumped as high as $2,079 an ounce to track a rally in gold.
The metal was last quoted at 2,031/2,046 late in New York,
and held below a lifetime high of $2,290 an ounce on March 4.
But platinum may be vulnerable to a correction amid signs
electricity supply in main producer South Africa was returning
to normal after power cuts in January forced mines to shut down
operations.
The mining disruptions have sparked supply fears and sent
prices to record.
"The power situation doesn't seem to be quite as bad as it
was earlier of the year. Eskom is indicating that there's more
power available than previously thought," said Moore.
State-owned power utility Eskom warned South Africans on
Wednesday to expect more power outages but said disruptions
would likely be minor. Mines are now operating at 90 to 95
percent of their normal electricity supply. []
Palladium <XPD=> rose to $431.00.50/439.50 an ounce from
$430.50/438.50 in late New York. Silver <XAG=> firmed to
$16.86/16.91 an ounce from $16.55/16.61.
(Editing by Nigel Hunt)
