Gold ticks up on oil, bargain buying; outlook shaky
SINGAPORE (Reuters) - Gold advanced on Thursday after a jump in oil prices triggered bargain buying, but it struggled to sustain early gains, which suggested bullion was not out of the woods yet after tumbling to this year's lows on Tuesday.
Other precious metals tracked gold's gains to defy a rising dollar. Investors await the release of the U.S. July consumer price index and weekly jobless claims data that could set the tone for the greenback.
Gold rose to $831.40/832.30 an ounce from $825.85/826.85 late in New York on Wednesday, when it jumped more than 1 percent. The metal was off an eight-month low of $801.90 ounce hit on Tuesday.
"I think the lower price's attracted buyers into the market. Given the extreme volatility of the gold price in recent days, I think picking the near term direction is very difficult," said David Moore, analyst at Commonwealth Bank of Australia.
"I think gold has been principally driven by investor activity and the U.S. dollar movement has been an important influence on gold," he said.
Gold, which struck an all time high at $1,030.80 in March, has lost much of the gains to profit taking, oil's falls from record and recently the dollar's rally against a basket of currencies which reduced the metal's safe-haven appeal.
"Definitely there's a bit of bargain hunting, but I don't think we are out of gold's decline yet. Resistance should be around $836 and then $845. The downside, of course, will still be around the $800s," said a dealer in Singapore.
Oil added 91 cents to $116.91 a barrel as declines in fuel and crude inventories in top consumer the United States helped offset concerns about global consumption.
In theory, expensive oil lifts gold's appeal as a hedge against inflation.
The dollar index, which gauges its performance against six major currencies, edged up 0.2 percent to 76.373 .DXY -- near a six-month high reached this week.
The dollar has surged as investors see major central banks cutting interest rates to limit the damage from the global economy's slowdown, while the Federal Reserve is expected to keep interest rates on hold after having already slashed them.
New York gold futures added $6.9 an ounce to $838.4.
Spot platinum rose to $1,513.00/1,533.00 an ounce from $1,501.50/1,521.50 late in New York. Spot palladium rose to $319.50/327.50 an ounce from $314.00/322.00 an ounce.
Silver edged up to $14.94/15.00 an ounce from $14.82/14.88 late in New York.
The most active Tokyo gold contract for June 2009 delivery on the Tokyo Commodity Exchange ended the morning session 43 yen per gram higher at 2,934 yen.
(Reporting by Lewa Pardomuan; Editing by Michael Urquhart)
