Gold off 28-year high, but holds above $800

SINGAPORE (Reuters) - Gold dipped but held firm above $800 an ounce on Monday because of surging oil and prices and a weak U.S. dollar and dealers said strong fundamentals could help the metal retest a record high of $850 soon.

Spot gold edged down to $803.10/803.90 an ounce from

$807.70/808.50 in late New York. Gold hit an intraday high of $807.60 on Monday, just below Friday's 28-year high of $807.70 ounce.

"I am sure gold will reach $850 by the end of this year," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.

Fatal mining accidents in South Africa, the world's main gold producer, ignited supply concerns and were supportive for prices while a falling dollar could encourage countries like China to sell the U.S. currency and buy commodities, said Sonoda.

Gold has risen more than 20 percent this year as record-high oil prices elevate its role as a hedge against inflation and a struggling dollar lifts its appeal as an alternative investment.

"Every government is very anxious about the dollar price. This will automatically support the gold price. There's a strong intention from the Chinese government to sell dollar," he said.

China holds 600 tonnes of gold in its reserves, according to the World Gold Council.

AngloGold Ashanti Ltd shut one of its larger mines in South Africa on Friday after a miner was killed in a rock-fall and as a miners' strike to protest against a spate of mine deaths in the country loomed.