UPDATE 5-Barrick profit climbs on record gold prices

(Adds dividend increase, updates shares to close)

By Cameron French

TORONTO, May 6 (Reuters) - Soaring gold prices and a timely decision to ditch its corporate hedge book paid off for Barrick Gold Corp (ABX.TO) in the first quarter as the world's top gold miner reported stronger earnings despite weaker production.

Speaking at the company's annual meeting on Tuesday, Acting Chief Executive Peter Munk painted a bright picture on supply and demand for the metal, pointing to surging jewelry demand from Asia, while noting an increasingly tight supply picture.

Such dynamics, along with gold's increasing appeal as a safe-haven alternative to the U.S. dollar, drove average gold prices up 42 percent on the year, pushing Barrick's realized gold price to a best-ever $925 an ounce.

Barrick took a $557 million charge a year ago to exit its forward sales contracts, or hedges, allowing it to sell its gold at spot prices that hit record high above $1000 in March.

While reluctant to predict how far gold would go, Munk said market dynamics are favorable for the metal.

"We're running out of major gold deposits, and the deposits we do have become increasingly difficult to come on stream," said Munk, the 80-year-old founder of the company, who has been running Barrick since CEO Greg Wilkins took a leave of absence in March, citing a serious medical condition.

Wilkins, who spoke at the meeting, has been in the office on a regular basis, said company spokesman Vince Borg, although there's no word on when or if he might return officially.