By Atul Prakash

LONDON (Reuters) - Gold surged to a 28-year peak above $780 an ounce Friday and platinum matched an all-time high as a record low dollar and lifetime-high crude oil spurred bullion buying.

Gold, often seen as a hedge against oil-led inflation and traditionally deemed a safe-haven asset, was gradually advancing towards the next big target of $800 while the dollar struggled to find a solid base.

A series of disappointing U.S. economic data has fuelled near-universal expectations that the U.S. Federal Reserve will cut interest rates by at least 25 basis points at its meeting next week -- a negative factor for the dollar and good for gold.

"The deteriorating economic picture is manifesting itself in a weaker dollar and that's helping gold. Oil is also looking strong. We are getting close enough to $800," said John Reade, head of metals strategy at UBS Investment Bank.

"The danger of a correction is still there but you are going to need a trigger for it," he said.

Spot gold hit a high of $785.70 to mark the highest since January 1980 when it rose to an all-time high of $850. It was quoted at $783.80/784.30 by 7:15 p.m., against $767.90/768.70 late in New York on Thursday.

Most-active December gold GCZ7 on the COMEX division of the New York Mercantile Exchange settled up $16.50 or 2.1 percent at $787.50 an ounce.

The metal has surged about 23 percent this year.