COMMODITIES-Gold, oil gain despite dollar's rise, copper falls
* Gold gains over 1 percent on physical buying, Chinese inflation
* Oil settles modestly higher on fears of more Middle East violence
* Copper falls on fears China's higher prices will hamper demand
* Soft commodities all rise; grains gain on hot weather worries
NEW YORK, July 9 (Reuters) - Chinese inflation data lifted gold to a one-week high and fears of further violence in Egypt kept oil prices firm despite the dollar's rally on Tuesday, but copper gave in to the dollar's strength as well as concerns about the impact of rising prices on China's growth.
At the Chicago Board of Trade, corn and soybean futures rose for a second straight session on worries that hot, dry weather in parts of the U.S. Midwest could stress crops later this month.
Wheat rose 2 percent as recent export demand from China and signs that the U.S. harvest is winding down triggered a round of short-covering.
Meanwhile, soft commodities coffee, cocoa and sugar gained. Robusta coffee futures on Liffe rose to a one-month high, as producers waited for higher prices before selling and speculators covered a large net short position. But ICE arabica coffee futures fell, pressured by Brazilian supplies as the harvest there picked up pace.
Cocoa futures gained on concerns that unfavorable weather would slow output in West Africa, and raw sugar on ICE Futures U.S. eked out a second straight day of gains.
The 19-commodity Thomson Reuters-Jefferies CRB index extended its gains to near three-week highs, around 284, lifted by higher prices of precious metals, grains, softs and oil.
Gold posted a one-week high, rising more than 1 percent on physical buying and as China's inflation data increased the metal's appeal as a hedge against rising prices.
"Clearly there is some dislocation in the physical market and maybe because demand has been surprisingly strong, that has caused some temporary shortages," said Societe Generale analyst Robin Bhar, adding that there has been a lot of gold borrowing in the last 24 hours.
Data showed China's annual consumer inflation accelerated more than expected in June, but factory-gate deflation persisted for a 16th month. The report underscored the policy dilemma facing the People's Bank of China as it worries about long-term price risks while economic growth slows.
Spot gold was up 1.03 percent at $1,248.66 per ounce at 4:10 p.m. EDT (2010 GMT) after rising earlier to $1,260, its highest level since July 2. Comex gold climbed $12, or 0.97 percent, to $1,246.90 an ounce.
Copper, however, was down as the dollar rose and China's inflation data reinforced worries about slowing growth in the world's top copper consumer, though risk appetite in the wider markets and oversold conditions kept losses in check.
The U.S. dollar rallied to a three-year high against major currencies, extending a bullish run on expectations that the Federal Reserve will reduce stimulus at a time when other major central banks are likely to ease further.
Three-month copper on the London Metal Exchange closed at $6,730 a tonne, down from $6,830 on Monday.
Crude oil prices on both sides of the Atlantic ended with moderate gains, supported by the stock market's advance and worries over Egypt, but were limited by a strong U.S. dollar and as supplies were brought back online.
Brent crude oil futures ended 38 cents higher at $107.81 per barrel. U.S. crude oil futures rose 39 cents to settle at $103.53, after trading as low as $102.31.
Fears that violence in Egypt could ignite conflict in the broader Middle East, which pumps a third of the world's oil, continued to support oil prices.
While oil prices shaved some gains, Brent was still hovering at a three-month high and U.S. crude at a 14-month peak.