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SINGAPORE, July 14 (Reuters) Gold rose to its highest level in seven weeks around $665 an ounce on Friday as crude oil futures hit a record high of above $78 a barrel, increasing the metal's safe-haven appeal.

Gold gained 1.7 percent to hit a high of $665.75 as concerns over Nigeria's supply and escalating tension between Israel and Lebanon briefly pushed up front-month U.S. crude for August delivery to $78.40 a barrel in ACCESS electronic trading.

Nearly 60 people have been killed since Israel began its reprisal raids for the capture two soldiers by Lebanon's Hizbollah guerrilla group.

Spot gold later dipped to $660.80/662.30 an ounce, still higher than $654.70/656.20 late in New York on Thursday, when gold rallied above $650 on global political tensions.

''It's hard to predict the top when there's a little event blowing up all the time. I think support is just a bit above $650,'' said commodities analyst Tobin Gorey of Commonwealth Bank of Australia in Sydney.

Profit taking would emerge at higher levels, but that would not be extensive enough to push the market down, said Gorey.

''Looking at the day ahead, it's hard to see prices falling very much.'' Israeli jets destroyed roads and junctions in Hizbollah's southern Beirut stronghold on Friday hours after Prime Minister Ehud Olmert ordered more intense strikes.

Gold is often bought as a hedge against inflation and for future sales in times of trouble. It hit a 26-year high of $730 in mid-May on record-high oil prices, uncertainty in the dollar's outlook and tensions in the Middle East.

Gold began its climb this week after a series of bombs hit railway carriages in India's financial hub Mumbai on Tuesday, killing about 180 people and wounding 700.

Safe-haven buying also resurfaced after North Korea's missile test launches last week raised tensions in north Asia.

China and Russia are moving closer to Japan's position on a U.N.

resolution over North Korea's missile tests, but Tokyo still wants the resolution to include sanctions, Japan's top government spokesman Shinzo Abe told Reuters on Friday.

In Tokyo, the benchmark June 2007 gold contract on the Tokyo Commodity Exchange rose to its highest since May 19 to 2,491 yen ($21.54) per gram before retreating to 2,487 yen.

That was 50 yen higher than Thursday's close.

''Gold is trending up at the moment, so it's very hard to define the top. When you break $660, there's a possibility the market will go higher,'' said a dealer in Singapore.

''Today is Friday, so profit taking may be coming in. But if oil stays at this kind of high level, people will be reluctant to sell too much. People will be watching the oil price, not so much of the dollar,'' he said.

The dollar was firmer at 115.85 yen just off the two-week high of 115.90 yen hit earlier on electronic trading platform EBS. The euro eased to $1.2675 from $1.2690 in late New York.

Investors awaited the release of U.S. retail sales data for June and the University of Michigan's consumer sentiment index for July for clues about the outlook for U.S. rates.

The Federal Reserve raised its funds rate for the 17th straight time to 5.25 percent last month and some expect the central bank to hike again in August.

Platinum hardly changed at $1,249/1,2543 an ounce. Sister metal palladium rose to $328/333 an ounce from $327/332.

Silver inched up to $11.66/11.70 an ounce from $11.52/11.62 late in New York.

Precious Metals Prices by 0426 GMT* Metal Last Net change Pct Move Gold 662.50 -0.20 -0.03 Platinum 1251.00 2.00 +0.16 Palladium 328.00 1.00 +0.31 Silver 11.65 0.01 +0.09 Change so far in 2006 Metal Latest bid End prev year Pct Move Gold 662.50 517.20 +28.09 Platinum 1251.00 968.00 +29.24 Palladium 328.00 254.00 +29.13 Silver 11.65 8.81 +32.24 * The closing prices used to calculate the net change may differ from New York's last quoted prices.

($1=115.66 yen) REUTERS CS RK1140