Gold firmer on higher oil, Tokyo futures drop

SINGAPORE, May 2 (Reuters) Gold rose on Wednesday on a rebound in crude oil, while Tokyo futures shrugged off a weaker yen and dropped on position-squaring ahead of a four-day holiday weekend.

The new benchmark gold futures for April 2008 delivery on the Tokyo Commodity Exchange ended the morning session down 7 yen per gram at 2,629 yen ($21.96). It had traded in range of 2,626 to 2,631 yen.

Japanese markets will be closed on Thursday and Friday for the Golden Week holidays, but some dealers said Tokyo futures may breach a key resistance of 2,650 yen when investors returned to the market after the long break.

The return of Japanese investors, whose purchases helped gold reach multi-year highs in 2006, will also boost the spot market, they said.

Spot gold rose to $674.20/674.70 an ounce from $673.70/674.20 an ounce late in New York on Monday, when it had fallen more than $5 on a surging dollar.

''I personally think the gold price will reach $700 by the end of June,'' said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.

Gold spiked to its highest level in 26 years to $730 in May 2006 as investors diversified their portfolios on Middle East tensions, record-high oil prices that raised fears of inflation as well as uncertainties in the U.S. dollar's outlook.

U.S. crude oil futures edged up on Wednesday after falling 2 percent the previous day following forecasts of a rebound in refinery throughput in the United States ahead of summer driving season. Sonoda said platinum was also bullish following the launch of exchange-traded funds in Europe, which may encourage private investors in Japan to buy the precious metal.

''That's a very good support for platinum,'' he said.

Precious metals consultancy GFMS Ltd said in April platinum may hit a record high of $1,450 an ounce this year, despite a potential surplus.

Platinum rose to $1,289/1,294 an ounce from $1,283/1,288 an ounce.

The benchmark platinum contract on TOCOM , currently April 2008, rose 10 yen per gram to 4,878 yen. The contract hit an all-time high of 4,942 yen on April 23 as funds bought on news of the launch of ETFs in Europe.

Palladium rose to $369/374 from $366/370.

Silver rose to $13.30/13.35 an ounce from $13.24/13.27 late in New York on Tuesday, when it fell to a one-month low of $13.11 an ounce.

In the currency market, the dollar was little changed at 119.77 yen, having hit a high of 119.90 yen on electronic trading platform EBS, its highest level since Feb. 27.

The euro was steady from late U.S. trading at $1.3603 , still in sight of a record high of $1.3683 hit on EBS last week.

Precious metals prices at 0212 GMT Last Net Change Pct Move Turnover (lots) TOCOM Gold 2629.00 -7.00 -0.27 25627 TOCOM Plat 4878.00 10.00 +0.21 17359 TOCOM Silver 514.50 -2.40 -0.46 726 TOCOM Pallad 1453.00 -2.40 +0.83 479 Spot Gold 674.00 Spot Plat 1289.00 Spot Silver 13.30 Spot Pallad 369.00 Change so far in 2007 Metal Latest bid End prev year Pct Move TOCOM Gold 2629.00 2445.00 +7.53 TOCOM Platinum 4878.00 4254.00 +14.67 TOCOM Silver 514.50 493.30 +4.30 TOCOM Pallad 1453.00 1255.00 +15.78 Spot Gold 674.00 636.10 +5.96 Spot Plat 1289.00 1132.00 +13.87 Spot Silver 13.30 12.85 +3.50 Spot Pallad 369.00 332.00 +11.14 Euro/Dollar $1.3591 Dollar/Yen 119.88 TOCOM prices in yen per gram, spot prices in $ per ounce.

($1=119.73 yen) REUTERS SR BD1118