PRECIOUS-Gold edges up, weak dollar supports

* Friday seen critical to whether gold holds $1,000

* SPDR Gold holdings XAUEXT-NYS-TT steady

By Miho Yoshikawa

TOKYO, Sept 11 (Reuters) - Gold rose above $1,000 on Friday
as the precious metal continued to benefit from a weaker dollar
amid growing risk appetite and inflation fears due to strong oil
prices.

The precious metal topped $1,000 an ounce on Tuesday for the
first time since February, with spot gold staging a stunning run
to an 18-month high of $1,007.45 on the same day, on technical
buying momentum and a slide in the dollar.

News that Barrick Gold (ABX.TO)(ABX.N) was cutting its
hedgebook of forward gold sales also helped fuel gains.
[ID:nN10419364]

Kazuhiko Saito, chief analyst at Fujitomi Co Ltd, said:
"Fears about inflation are what is providing the support in the
market now."

Gold XAU= was at $1,000.45 per ounce at 0324 GMT, up 0.5
percent from the notional New York close of $995.50.

U.S. gold futures for December delivery GCZ9 were at
$1,002.8 per ounce, up 0.6 percent.

December gold futures rose on Tuesday to as high as
$1,009.70, their highest since February.

It remains to be seen, however, whether gold will be able to
maintain these lofty levels, or mark new highs.

Saito said gold's performance on Friday, when there was a
possibility it could fall in fund profit-taking, would be
crucial.

"Whether gold manages to hang on to $1,000 today will be
important," he said.

The dollar hit a seven-month low against the yen on Friday
after solid Chinese economic data triggered dollar-selling
against higher-yielding currencies and other majors. [USD/]

A weaker dollar enhances gold's allure as an alternative
asset, a factor which has helped fuel this week's rally.

Oil prices rose to top $72 a barrel on Friday, extending the
previous session's four-day rally after a U.S. report showed a
surprise decline in crude stockpiles and OPEC said it would
maintain official output curbs. [O/R]

Data on Friday showed the global economy was on track to lift
itself out of its slump.

Widely awaited data on Friday showed China's industrial
output expanded in August at the fastest rate in 12 months and
narrowly topped forecasts, showing it was well on the road to
recovery. [ID:nPEK293624]

Other figures issued on Friday showed China's exports in
August fell by about 20 percent from a year earlier, and the
country's economic recovery fundamentals are not solid, a top
Chinese planning official said. [ID:nBJD003026]

However, Friday's data proved solid enough to erase worries
about the state of the Chinese economy, traders said.

Japan's economy grew a revised 0.6 percent in the three
months to June, less than preliminary figures had shown but
confirming that the economy had crawled out of recession after a
full year of contraction. [ID:nT287585]

The unexpected downward revision was mostly due to falls in
inventories, which analysts took as a positive sign for the
world's No.2 economy.

Traders have pointed to a lack of physical buying of gold,
including by major consumer India, as a factor likely to
undermine the current rally.

There was a lack of fresh investment flows into the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
(GLD).

The latest data showed holdings in the SPDR Gold Trust (GLD)
stood at 1,077.63 tonnes, unchanged since Sept 4. [GOL/SPDR]
PRICES
Precious metals prices at 0322 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1000.35 4.85 +0.49 13.66
Spot Silver 16.81 0.13 +0.78 48.50
Spot Platinum 1285.00 1.00 +0.08 37.88
Spot Palladium 289.50 1.00 +0.35 56.91
TOCOM Gold 2952.00 -10.00 -0.34 14.73 25462
TOCOM Platinum 3786.00 -21.00 -0.55 42.76 5909
TOCOM Silver 492.80 5.30 +1.09 54.34 311
TOCOM Palladium 857.00 -6.00 -0.70 55.82 428
Euro/Dollar 1.4609
Dollar/Yen 91.39
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 Watson)