Gold ends near 10-day high as markets change tack

LONDON (Reuters) - Gold prices hit a 10-day high on Thursday, lifted by investor buying as oil prices rose, the dollar slipped, equities fell and the U.S. Mint suspended American Eagle bullion coin sales, citing soaring demand.

Gold rose to $839.00 an ounce, the highest since August 11, and was at $832.40/833.40 by New York's last quote at 2:15 a.m. EST (6:15 p.m. EDT), up from $810.35/811.75 an ounce late in New York on Wednesday.

Buying momentum in the gold market improved after the U.S. Mint temporarily suspended sales of its American Eagle bullion coins due to a shortage of the popular coins as demand soared following a recent sharp retreat in gold prices.

"Due to the unprecedented demand for American Eagle gold one-ounce bullion coins, our inventories have been depleted. We are therefore temporarily suspending all sales of these coins," the U.S. Mint told authorized coin dealers in a memorandum.

U.S. gold futures for December delivery settled at up $22.70, or 2.8 percent, at $839.00 an ounce on COMEX.

In addition, a softer dollar and geo-political concerns were the key drivers behind the short-term correction within what is an overall bear market, said Dresdner Kleinwort consultant Peter Fertig.

"In the medium term, the dollar is going to strengthen again against the euro and that is going to weigh, not only on crude oil, but also on gold," he said.

Oil ended up more than $5 at $121.18 a barrel, after Russia responded angrily to a U.S. missile shield agreement with Poland, raising the threat of a supply disruption from the huge energy producer.

"Oil prices at current levels could attract further investment fund flows into precious metals," Standard Bank said in a note, adding that technical signals indicated precious metals were due for a correction.

The firmer dollar in recent months has pulled gold down by around 20 percent from its all-time high of $1,030.80 an ounce hit in March, and a lower price has attracted buying.

Demand for gold in top consumer India fell sharply after prices hit a record but as the country heads into the festival and wedding season, demand will rise.

"There are signs that physical demand is rising sharply in response to low prices," said Eugen Weinberg, commodities analyst at Commerzbank.

"Indian demand should rise rapidly over the next few months, especially with the country's main religious holidays approaching, which should provide an additional boost."

A weaker U.S. currency makes commodities priced in dollars cheaper for holders of other currencies. Investors also use gold as a hedge against financial turmoil and inflation, often triggered by high oil prices.

In platinum, palladium and silver, market watchers also view the recent sell-off as overdone and expect a bounce.

But over the longer term, analysts expect platinum's fortunes to be tied to the health of the global car industry, which has experienced sharply declining sales.

Spot platinum ended firmer at $1,449.50/1,469.50 an ounce from $1,368.50/1,388.50 an ounce late on Wednesday.

Earlier, it rose to an intra-day high of $1,454 -- the highest since August 15.

Palladium was higher at $286.00/294.00 from $281/289 and silver rose to $13.82/13.88, up 5 percent, from its previous U.S. close of $13.15/13.21. Silver hit an intra-day high of $13.87 -- the highest since August 15.

(Additional reporting by Frank Tang in New York; Editing by David Gregorio)