* Gold chops back and forth to the tune of the dollar
* Hurricane Ike supports oil prices, underpinning gold
* U.S. bailout impact on commodities still uncertain
(refreshes throughout)
By Anna Stablum
LONDON, Sept 8 (Reuters) - Gold swung back and forth on
Monday, twice rising 2 percent before partially relinquishing
the gains, tracking moves in the dollar and oil prices.
Analysts digested the impact on commodities from a U.S.
bailout of two top mortgage lenders, which may encourage
investors to return to riskier assets.
"The dollar is at the fore ... if we see the dollar break
below $1.42 to the euro then gold will go swiftly under $800 an
ounce again," said analyst Tom Kendall at Mitsubishi.
Spot gold <XAU=> extended gains into a second session to
stand at $810.50 per ounce by 1412 GMT, up from $801.10 in late
New York trade on Friday. Prices twice visited the day's high of
$818.00 but failed each time to make further headway.
Traders said the market was choppy and thin volumes were
helping to exaggerate price moves.
Gold hit a year-to-date low of $773.90 on Aug. 15.
Earlier in the session gold was buoyed by the euro's <EUR=>
gains against the dollar, rising to around $1.4430, off an
11-month low of $1.4197 touched last week. It was last quoted at
$1.4204.
The dollar initially fell in the aftermath of the weekend
action as investors took the government's takeover of the
stricken mortgage agencies as an excuse to pile back into
riskier assets.
Crude oil <CLc1> rose to over $109 a barrel, rebounding from
a five-month low as Hurricane Ike spun twoards the U.S. Gulf of
Mexico oil hub.
"Today the atmosphere in the gold market is somewhat
positive again with oil prices seeming to stabilise a bit," said
Alexander Zumpfe, trader with Heraeus Metallhandelsgesellschaft.
He noted good physical demand notably from retail investors.
Gold generally is seen as a hedge against oil-led inflation
and often moves in the opposite direction of the dollar as it
becomes cheaper for investors holding other currencies.
Some analysts said gold's bounce on Monday appeared more
likely to be cautionary short-covering after a tumble from
nearly $1,000 an ounce in mid-July.
The outlook for gold remained bearish, but it could gather
safe-haven appeal with the outlook for the U.S. currency and the
economy unclear, traders said.
The market needed more time to see the impact of the U.S.
government's action regarding the two U.S. mortgage giants.
"It is a reason to be less bullish on the dollar, but not
bearish," Kendall said, adding that the knock-on effect on
commodities could be brief.
A firm U.S. currency makes dollar-priced commodities more
expensive to holders of other currencies and tends to cap
prices.
The U.S. government acted on Sunday to seize control of
mortgage finance companies Fannie Mae <FNM.N> and Freddie Mac
<FRE.N>, in a move that may temper the global financial market
turbulence that has threatened economic growth. []
Silver <XAG=> was firmer at $12.35/12.40 against
$12.19/12.27 in New York on Friday when it hit its lowest level
in a year, prompting buying from industrial consumers and
investors.
"Silver has been oversold relative to gold and that is
giving it a touch of support ... otherwise the market is mostly
taking its direction from gold," Kendall said.
Platinum <XPT=> strengthened to $1,357.50/1,377.50, up from
Friday's last quote of $1,353.00/1,373.00. Palladium <XPD=> was
little changed at $266.50/274.50 from $267.00/275 in New York.
(Additional reporting by Clare Black, editing by Hans Peters)
