* Gold near record high as dollar drops on economic worry
* Strong finish above $1,100/oz boosts further gains
* Sentiment positive on renewed central bank interest
(Recasts, updates prices, market activity to close; adds
second byline, dateline, previously LONDON)
By Frank Tang and Rebekah Curtis
NEW YORK/LONDON, Nov 13 (Reuters) - Gold turned higher on
Friday to trade within striking distance of its record high, as
a lower dollar amid economic worries boosted bullion's appeal
as a currency hedge.
A strong finish above key technical support $1,100 an
ounce, driven by the dollar's decline and renewed central bank
interest, should fuel further gains next week, traders said.
Spot gold <XAU=> was at $1,115.50 per ounce at 2:03 p.m.
EST (1903 GMT), up from a late quote of $1,103.60 in New York
on Thursday, when it rallied to a record high of $1,122.85.
U.S. December gold futures <GCZ9> settled up $10.10 at
$1,116.70 an ounce at the COMEX division of NYMEX.
"The rally is probably a function of continued concerns
about the dollar going into next week," said James Steel,
analyst at HSBC in New York. "Another surprise was the fact
that gold was able to rally against weak crude prices," he
said.
The dollar fell broadly after data showed U.S. consumer
sentiment falling in early November to its weakest in three
months. []
The U.S. currency is still down about 7 percent so far this
year, making commodities priced in the greenback cheaper for
holders of other currencies and boosting gold's price
prospects.
"The only thing that seems likely to puncture this would be
a reversal in the dollar, but it's still on a clear downward
trend," said Stephen Briggs, a commodities strategist for RBS
in London, adding there was a "uniformity" in the market's view
that the dollar would weaken further.
Traders noted that market sentiment has improved after the
International Monetary Fund sold 200 tonnes of gold to India
last week.
The news fueled expectations that other central banks would
make a run for the remaining 203.3 tonnes gold approved for
sale by the IMF.
"If another central bank comes out and decides to get more
IMF gold, it will continue to be supportive to the market,"
said Adam Klopfenstein, senior market strategist at
Lind-Waldock. "It's the fear of not able to get your hands on
the gold.
OIL FALLING
U.S. crude oil <CLc1> initially fell and touched its lowest
level in almost a month, further weighing on gold as it often
moves in line with crude, both because it can be used as a
hedge against oil-led inflation and as rising crude prices
often increase interest in commodities as an asset class.
Late in the session, oil steadied near $77 a barrel as a
weaker dollar offset demand concerns from bulging fuel
inventories in the United States.
Silver <XAG=> traded at $17.37, up from Thursday's New York
late quote of $17.21. Platinum <XPT=> was at $1,382, up from
$1,350.50 and palladium was at $353.50, up from $346.95.
Some warned that fundamentals for silver remain a concern.
"Silver is really struggling to keep up with gold at the
moment because this is a gold story, it is not a silver story,"
RBS' Briggs said. "Silver is only a geared play on gold, its
own fundamentals are not great. If it weren't for the ETF
buying the market is in surplus."
(Additional reporting by Chris Kelly in New York, Humeyra
Pamuk in London; Editing by David Gregorio)
