PRECIOUS-Gold up over 2 pct to 11-week high as oil jumps

* Gold rises over 2 pct on strong oil, Israel-Hamas
violence

* Gold gains 30 percent from 13-month low struck in Oct
(Updates prices, activity in physical market, premiums)

By Lewa Pardomuan

SINGAPORE, Dec 29 (Reuters) - Gold rose more than 2 percent
on Monday to its strongest since early October after violence
between Israel and Hamas pushed up oil prices on fears of
supply disruptions, and spurred safe-haven buying in bullion.

Demand from Japanese investors, who fretted over the
deepening global economic downturn, also drove gold prices
higher but thin trading ahead of the year-end exaggerated
movements. Gold has rallied more than 30 percent since hitting
a 13-month low two months ago.

Gold XAU= hit an intraday high of $889.55 an ounce before
easing to $881.85 an ounce by 0454 GMT, still $15.05 higher
than New York's notional close on Friday. Gold has gained more
than 6 percent in the past week.

"From a gold perspective, prices are certainly likely to
move higher on any tensions, wars and uncertainty. But what was
more surprising was the timing of the violence between Israel
and Hamas," said Adrian Koh, analyst at Phillip Futures in
Singapore.

"That's the thing that caught everyone by surprise. The
markets are still very much in thinned-holiday trade and the
news of the violence basically spurred buying and pushed prices
past key resistance levels."

U.N. Secretary-General Ban Ki-moon called for an immediate
end to all violence in Gaza, where at least 300 Palestinians
were killed in two days of attacks as Israel stepped up air
strikes and prepared for a possible invasion. [ID:nN28295404]

Oil CLc1 rose more than $2 to above $39 a barrel in
reaction to the violence, lifting gold's safe-haven appeal in
times of turmoil. [O/R]

The physical market saw buying from Japanese investors but
high prices also encouraged some holders to cash in, putting
pressure on premiums for gold bars in Hong Kong and Singapore
<GOLD/ASIA1>.

"The Japanese have been on the buying side since last week
and that helps push up spot prices. Jewellers are basically out
of the market because of the year-end, and we see light selling
from Vietnam, Thailand and Indonesia," said a physical dealer.

Premiums for gold bars slipped to 30 U.S. cents to the spot
London prices from 50 cents last week in Singapore. Gold bars
were on par with London prices in Hong Kong.

"Whether or not we'll see a reversal, given that there is
not a great deal of activity out there, is debatable. I suspect
we may remain elevated for the rest of the day," said Darren
Heathcote of Investec Australia in Sydney, referring to gold
prices.

"The fact that it's sort of stalled where it is might well
prevent it from breaking through $900 but I guess there's still
a chance when London opens and they really soak up the news
about the troubles in the Middle East. Maybe, there will be
some more buying as a result," he said.

Gold last traded above $900 in early October and hit a
lifetime high of $1,030.80 in March, partly driven by fears of
rising energy costs as oil struck a record.

Other precious metals tracked gold higher, with platinum
XPT= trading at $921.50 an ounce, up $33.00 from New York's
notional close.

New York gold futures GCG9 added $13.80 an ounce to
$885.0 in electronic trade.
Precious metals prices at 0554 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 881.85 15.05 +1.74 5.90
Spot Silver 10.79 0.15 +1.41 -26.95
Spot Platinum 921.50 33.00 +3.71 -39.38
Spot Palladium 180.50 6.00 +3.44 -50.95
TOCOM Gold 2575.00 101.00 +4.08 -15.85
38463
TOCOM Platinum 2680.00 102.00 +3.96 -49.80
10628
TOCOM Silver 314.00 13.40 +4.46 -41.96
363
TOCOM Palladium 534.00 23.00 +4.50 -60.47
257
Euro/Dollar 1.4160
Dollar/Yen 90.50
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Lincoln Feast)