Gold climbs above $900 after oil ticks up

LONDON (Reuters) - Gold climbed back through $900 an ounce on Wednesday to a new 10-day high as a pick-up in oil prices, which sparked buying of gold as an inflation hedge, sent the precious metal through key technical levels.

Gold reached a peak of $907.70, its highest since June 9, before easing with oil to trade at $904.30/905.70 at 1421 GMT, against $890.75/891.95 late in New York on Wednesday.

"(Gold) has been threatening this for the last few days," said Simon Weeks, director of precious metals trading at Scotia Capital.

"Gold is starting to find its feet, given the global (inflationary) environment we are in, and given what we have seen coming out in terms of U.S. data releases," he added. "General sentiment is good."

The metal shrugged off a firmer U.S. dollar on Thursday, as other factors took over. A brief move higher in oil prices was enough to start the precious metal's rally on Wednesday.

Rising fears over inflation on both sides of the Atlantic and uncertainty over the outlook for currency and equity markets are boosting gold, which is a popular safe haven for funds.

The metal has historically benefited from economic turmoil, and the threat of recession hanging over the United States in the past year. Concerns over the health of equity markets have also firmly underpinned the metal.

Gold reached an all-time high of $1,030.80 in March as the weak dollar, rising oil prices and concerns over the economic outlook spurred buying.

The technical picture is looking good for gold, analysts said, with another close above $888 seen as giving the precious metal a solid floor for an upward move.