UPDATE 2-Gold bounces on bargain hunting, record oil helps

* Gold bounces on bargain hunting, physical buying

* Oil holds near record high, euro dips

* Chinese buy more gold as hedge against inflation
(Updates prices, adds quotes)

By Lewa Pardomuan

SINGAPORE, July 4 (Reuters) - Gold rebounded on Friday
after falling 1 percent in New York on a firm U.S. dollar, as
record high oil offered an excuse to investors to buy the metal
as a hedge against inflation.

Bargain hunting, purchases from jewellers in Singapore and
Hong Kong as well as demand from speculators in Tokyo also
lifted prices, but gold was likely to trade in a range before
the U.S. Independence Day holiday, said dealers.

Gold <XAU=> rose to $935.30/936.30 an ounce from
$932.70/934.70 late in New York on Thursday, when it dropped
after payroll data suggested the U.S. job market and economy
are not as dire as many investors had feared.

Gold jumped to its strongest level in more than two months
at $946.50 this week, and gains in ETF holdings XAUEXT-NYS-TT
suggested investors regained confidence in gold after volatile
trade in recent weeks, said dealers.

"There's been increased investment in the gold ETFs, and
that's already apparent in the price. I think gold is still at
a level that has been obviously determined by investor
activity," said David Moore, analyst at Commonwealth Bank of
Australia.

"With oil prices still high, I think that would offer some
base levels support for the gold price but a lot would depend
on how the U.S. dollar moves in the next few days," he said.

Oil CLc1 was steady around $145 a barrel on Friday,
pausing for breath after hitting a record high of nearly $146.
[O/R]

Gold struck a record at $1,030.80 in March on record-high
crude oil, which raised fears of inflation and expectations of
more rate cuts in the United States, making the metal more
attractive as an alternative investment.

The euro <EUR=> inched down to as low as $1.5673.

The dollar rose after the U.S. jobs report for June landed
largely as forecast and nowhere close to a scenario feared by
investors, while the European Central Bank president struck a
less aggressive tone on prospects for interest rate hikes.
[USD/]

"There are still concerns about oil prices," said Ronald
Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding
that tensions between Iran and Israel also supported gold.

"I think we can say $925 is the support, while resistance
lies ahead at $945 to $950. If the Iranian crisis worsens, of
course we should see $1,000," he said.

Speculation has mounted in recent weeks that Israel may be
preparing a preemptive strike against Tehran's nuclear
programme.

In fundamental news, ordinary Chinese are investing more
actively in gold as an alternative hedge against decade-high
inflation, a senior industry executive said. [ID:nPEK343622]

Gold futures for August delivery GCQ8 on the COMEX
division of the New York Mercantile Exchange added $3.7 an
ounce to $937.3.

Spot platinum <XPT=> rose to $2,026.50/2,046.50 an ounce
from $2,017.50/2,037.50 late in New York. Spot palladium <XPD=>
slipped to $459.50/467.50 an ounce from $460.50/468.50 an
ounce.

Silver <XAG=> edged up to $18.22/18.28 an ounce from
$18.21/18.31 late in New York.

The most active Tokyo platinum contract for June 2009
delivery <0#JPL:> on the Tokyo Commodity Exchange fell 55 yen
per gram to 6,875 yen, tracking declines in New York futures.
Precious metals prices at 0502 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 935.15 2.30 +0.25 12.30
Spot Silver 18.22 0.02 +0.11 23.36
Spot Platinum 2026.50 9.00 +0.45 33.32
Spot Palladium 459.50 -1.00 -0.22 24.86
TOCOM Gold 3242.00 -5.00 -0.15 5.95
20241
TOCOM Platinum 6877.00 -53.00 -0.76 28.81
17888
TOCOM Silver 632.80 -0.70 -0.11 16.97
802
TOCOM Palladium 1619.00 -12.00 -0.74 19.84
499
Euro/Dollar 1.5716
Dollar/Yen 106.74
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)