Harga Emas menunjukkan kenaikan ke atas kelemahan Dollar, jikalau trend ini berterusan berkemungkinan harga emas akan melonjak naik untuk kali kedua.
* Gold climbs to firmest level since late February
* Dollar hits 5-month lows vs basket of currencies
* Oil prices hit new 6-month peak
(Updates throughout, adds comment)
By Jan Harvey
LONDON, May 29 (Reuters) - Gold jumped to a new three-month high above $975 on Friday as traders bought the metal as a hedge against weakness in the dollar, which fell to five-month lows against a basket of currencies.
Rising oil prices, reports of a pick-up in Middle Eastern demand, and firm buying in India, the world's biggest gold consumer, during the wedding season are also supporting prices, analysts said.
"If the dollar continues to be sold, the first obvious target is $1,006 an ounce, which is the peak we had in February this year," said Tom Kendall, precious metals strategist with Mitsubishi Corp.
"That is feasible over the next week or so, if that trend in the dollar continues."
The U.S. currency extended losses against the euro and yen after GDP data showed the U.S. economy contracted by less than initially estimated in the first quarter. [FRX/]
The dollar <.DXY) hit five-month lows against a basket of currencies amid fears over the impact of aggressive stimulus spending on U.S. government debt.
Its slide has prompted investors to take refuge in gold, pushing prices up to three-month highs.
"In the near term, the dominant theme behind moves in gold appears to be moves in the U.S. dollar rather than inflation expectations - which declined yesterday after a recovery in the U.S. bond market," said UBS analyst John Reade in a note.
"But a combination of a weaker dollar and rising inflation expectations would represent the perfect storm for gold."
In Milan, the World Gold Council's investment research manager Rosanna Wozniak told Reuters she expected global investment demand to remain firm throughout the year, though jewellery and industrial usage would drop. [ID:nLT1007829]
Prices are benefiting from strong investment demand for the metal, with buying of silver-backed exchange-traded funds soaring since the beginning of 2009 and speculative net long positions on the COMEX futures exchange rising.
While industrial and photographic demand for the metal is lacklustre, investors are buying the metal as a cheap proxy for gold. It too is being seen as a good portfolio diversifier to hedge against dollar weakness and inflation.
"This trend (for rising prices) is likely to persist as we head into the summer months and more `green shoots' offer additional support to silver's appeal as an industrial metal as well," said VTB Capital in a note.
ETF Securities said holdings of its platinum
Holdings of its three gold-backed ETFs also ticked up nearly 11,000 ounces to 7.477 million ounces, it added. (Editing by James Jukwey)