UPDATE 2-Gold rallies to above $920 as oil revives

(Updates prices)

By Miho Yoshikawa

TOKYO, May 23 (Reuters) - Gold bounced back to surpass $920
an ounce on Friday, drawing strength from firmer crude oil
prices.

Traders retained their confidence in the precious metal even
after it earlier fell to an intraday low of $914.55 an ounce,
saying they expected the precious metal to continue to be bought
as an inflation hedge given that oil prices were likely to stay
strong.

Investors also expected a weak U.S. currency to continue to
make the dollar-based metal attractive to holders of other
currencies.

"Gold's fate continues to be bound closely to that of crude
oil and the dollar," said Tatsuo Kageyama, an analyst at Tokyo's
Kanetsu Asset Management.

Spot gold XAU= was at $922.95/923.95 an ounce at 0850 GMT,
up from late New York levels of $917.60/918.80.

It rose as high as $935.30 on Thursday, its highest level
since April 18.

Gold has slipped about 10 percent from a record high of
$1,030.80 marked on March 17, but many analysts were optimistic
about the market's upside.

Traders said $950 is the next psychological resistance
level.

"I think we'll see buying again after the recent round of
selling runs its course," Kageyama said.

U.S. crude oil futures stood near $132 a barrel, recovering
from a strong bout of profit taking in the previous session that
pulled prices back more than 3 percent from a record high of
$135.09. [O/R]

In the currency market, the euro was around $1.5731 EUR=,
after rising to a one-month high above $1.5800 on Thursday. The
dollar slipped about 0.2 percent to 103.82 JPY=.

Gold futures for June delivery GCM8 on the COMEX division
of the New York Mercantile Exchange were at $923.30, up $5 per
ounce.

Benchmark April gold <0#JAU:> on the Tokyo Commodity
Exchange finished up 4 yen at 3,105 yen per gram.

Spot platinum XPT= rose to $2,175/2,185 an ounce, up from
late New York levels of $2,156.50/2,176.50.

The bullish outlook for platinum was reinforced by a Johnson
Matthey report released this week, which said the price of
platinum could spike to a record high of $2,500 in 2008 due to
production shortfalls and strong demand. Platinum struck a
record high of $2,290 on March 4.

It said supplies of the metal would likely struggle this
year, largely due to disruptions in South Africa, the supplier
of about 80 percent of the world's platinum which has been
suffering from strains on its power grid.

On Thursday, South Africa's state-owned power utility Eskom
warned that the risk of emergency power cuts had increased
significantly due to technical problems. [ID:nL22155251] The
world's largest platinum mine and key gold mines are located in
South Africa.

Spot silver XAG= rose to $18.07/18.12 from late New York
levels of $17.92/17.98, while spot palladium XPD= was at
$450/458, up from $448/$456.

Precious metals prices at 0903 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 922.15 1.30 +0.14 10.74
Spot Silver 18.03 0.09 +0.50 22.07
Spot Platinum 2175.00 22.00 +1.02 43.09
Spot Palladium 449.50 1.50 +0.33 22.15
TOCOM Gold 3105.00 4.00 +0.13 1.47 44466
TOCOM Platinum 7083.00 30.00 +0.43 32.67 33856
TOCOM Silver 611.70 8.00 +1.33 13.07 799
TOCOM Palladium 1536.00 7.00 +0.46 13.69 902
Euro/Dollar 1.5732
Dollar/Yen 103.81
(Editing by Ben Tan)