UPDATE 1-Gold up after sharp fall on lower oil, higher doller

                                
 (Adds quote, details, prices by the end of the morning
session)
                                
 By Maryelle Demongeot
                                
 SINGAPORE, May 30 (Reuters) - Gold edged up on Friday,
recouping some of the losses of the previous session when it
fell by more than 2 percent on tumbling oil prices and a rising
dollar.
                                
 Spot gold <XAU=> stood at $878.25/879.25 an ounce by 0329
GMT, up from $877.85/879.25 an ounce late in New York on
Thursday.
                                
 Gold fell to a two-week low on Thursday, dragged down by
oil prices that continued to retreat from last week's record
highs, and a stronger dollar that has risen to close to a
three-month high against the yen.
                                
 "The U.S. dollar was firmer and oil prices were weaker.
These influenced gold prices because of their impact on
investment flows and inflation expectations," said David Moore,
an analyst with Commonwealth Bank of Australia in Sydney.
                                
 The bullion is often sought after for its appeal as an
alternative currency and hedge against inflation, and tends to
move in an opposite direction to the dollar.
                                
 The U.S. dollar was quoted at 105.45/105.49 yen <JPY=> on
Friday, hovering near a three-month high of 105.88 yen struck
on Thursday after an upward revision to U.S. economic growth
figures added to evidence that the United States may stave off
recession and underscored expectations for the Federal Reserve
to raise interest rates this year. [USD/]
                                
 The U.S. economy grew a bit faster than initially thought
in the first quarter, with gross domestic product up a 0.9
percent annual rate, against earlier estimates calling for an
anemic 0.6 percent rate.
                                
 "Over the next few months, gold could remain very volatile
as it is influenced very much by movements in the U.S. dollar,
which will in turn be be influenced by perceptions of the
outlook for the U.S. economy," Moore added.
                                
 Meanwhile, oil edged down on Friday after falling by a
hefty $4.41 on Thursday, when traders shrugged off an
unexpected drop in weekly inventories and focused on signs that
oil demand was edging down in the U.S. and in Asia's developing
countries.
                                
 Front-month U.S. crude for July delivery <CLc1> was down 35
cents at $126.27 a barrel on the Globex electronic trading
platform, down more than $8 from last week when it hit a record
high $135.09.
                                
  Gold futures for August delivery <GCM8> on the COMEX
division of the New York Mercantile Exchange were down $0.10 an
ounce at $881.70 an ounce.
                                
 The most active Tokyo gold futures contract <0#JAU:>, for
April, tracked the fall in gold prices and was down 51 yen at
3,007 yen per gram by the end of the morning trading session on
the Tokyo Commodity Exchange.
                                
 Other precious metals also fell in line with gold, with
platinum slipping by more than 4 percent on Thursday to touch a
three-week trough and sliver shedding 4.3 percent in choppy
trade.
                                
 Spot platinum <XPT=> fell further on Friday and was quoted
at $1,965.50/1,985.50 an ounce, from $1,990.50/2,010.50 in late
trade on Thursday.
                                
 The most active Tokyo platinum futures <0#JPL:>,for April,
was down 226 yen per gram to 6,527 yen by the end of the
morning session, heading towards its 300-yen daily limit fall..
                                
 Silver <XAG=> edged further down to $16.66/16.72 an ounce
from $16.86/16.92 late in New York, unmoved by a decision by
Peru's largest federation of mining unions to hold a nationwide
strike starting on June 16 after Congress delayed voting on a
bill to improve labour benefits.
                                
  Peru is the world's leading silver producer, ranks second
in copper and zinc, and fifth in gold, according to government
data. [ID:nN29409394]
                                
 Spot palladium <XPD=> also fell, to $421.50/$426.50 an
ounce, from 427.50/435.50.
                                
 Precious metals prices at 0329 GMT
 Metal             Last    Change  Pct chg  YTD pct chg
Turnover
 Spot Gold         878.25    1.85   +0.21      5.47
 Spot Silver        16.66    0.10   +0.60     12.80
 Spot Platinum    1965.50  -21.00   -1.06     29.31
 Spot Palladium    421.50    0.00   +0.00     14.54
 TOCOM Gold       3007.00  -51.00   -1.67     -1.73       
17833
 TOCOM Platinum   6527.00 -226.00   -3.35     22.25       
13875
 TOCOM Silver      572.00  -24.40   -4.09      5.73         
513
 TOCOM Palladium  1459.00  -28.00   -1.88      7.99         
478
 Euro/Dollar       1.5524
 Dollar/Yen        105.45
                                
  Note - TOCOM prices in yen per gram, except TOCOM silver
which is priced in yen per 10 grams. Spot prices in $ per
ounce.
 (Editing by Michael Urquhart)